Results: Giga Device Semiconductor Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Giga Device Semiconductor Inc. (SHSE:603986) last week reported its latest third-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues were CN¥2.0b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of CN¥0.47 were also better than expected, beating analyst predictions by 17%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Giga Device Semiconductor

Taking into account the latest results, the most recent consensus for Giga Device Semiconductor from 18 analysts is for revenues of CN¥9.36b in 2025. If met, it would imply a sizeable 33% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 185% to CN¥2.39. Before this earnings report, the analysts had been forecasting revenues of CN¥9.31b and earnings per share (EPS) of CN¥2.38 in 2025. 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¥94.37, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Giga Device Semiconductor at CN¥116 per share, while the most bearish prices it at CN¥56.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Giga Device Semiconductor's growth to accelerate, with the forecast 26% annualised growth to the end of 2025 ranking favourably alongside historical growth of 12% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 23% annually. Giga Device Semiconductor is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at CN¥94.37, 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 Giga Device Semiconductor. Long-term earnings power is much more important than next year's profits. We have forecasts for Giga Device Semiconductor going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Giga Device Semiconductor that you need to take into consideration.

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.