StarPower Semiconductor Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

It's shaping up to be a tough period for StarPower Semiconductor Ltd. (SHSE:603290), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Unfortunately, StarPower Semiconductor delivered a serious earnings miss. Revenues of CN¥805m were 19% below expectations, and statutory earnings per share of CN¥0.95 missed estimates by 34%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for StarPower Semiconductor

Following the latest results, StarPower Semiconductor's 17 analysts are now forecasting revenues of CN¥3.98b in 2024. This would be an okay 7.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to descend 15% to CN¥4.30 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CN¥4.72b and earnings per share (EPS) of CN¥6.47 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a large cut to earnings per share numbers as well.

Despite the cuts to forecast earnings, there was no real change to the CN¥202 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values StarPower Semiconductor at CN¥261 per share, while the most bearish prices it at CN¥150. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the StarPower Semiconductor's past performance and to peers in the same industry. It's pretty clear that there is an expectation that StarPower Semiconductor's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 37% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 23% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than StarPower Semiconductor.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for StarPower Semiconductor. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CN¥202, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on StarPower Semiconductor. Long-term earnings power is much more important than next year's profits. We have forecasts for StarPower Semiconductor going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for StarPower Semiconductor (1 makes us a bit uncomfortable) you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.