Giga Device Semiconductor Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

A week ago, Giga Device Semiconductor Inc. (SHSE:603986) came out with a strong set of second-quarter numbers that could potentially lead to a re-rate of the stock. Giga Device Semiconductor beat earnings, with revenues hitting CN¥2.0b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 13%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Giga Device Semiconductor after the latest results.

Check out our latest analysis for Giga Device Semiconductor

Taking into account the latest results, the most recent consensus for Giga Device Semiconductor from 17 analysts is for revenues of CN¥7.56b in 2024. If met, it would imply a notable 18% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 218% to CN¥1.63. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥7.43b and earnings per share (EPS) of CN¥1.62 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of CN¥94.82, showing that the business is executing well and in line with expectations. 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. The most optimistic Giga Device Semiconductor analyst has a price target of CN¥125 per share, while the most pessimistic values it at CN¥76.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Giga Device Semiconductor's growth to accelerate, with the forecast 40% annualised growth to the end of 2024 ranking favourably alongside historical growth of 15% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 22% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Giga Device Semiconductor is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Giga Device Semiconductor. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Giga Device Semiconductor going out to 2026, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Giga Device Semiconductor , and understanding them should be part of your investment process.

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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.