Earnings Miss: Montage Technology Co., Ltd. Missed EPS By 7.5% And Analysts Are Revising Their Forecasts

The analysts might have been a bit too bullish on Montage Technology Co., Ltd. (SHSE:688008), given that the company fell short of expectations when it released its yearly results last week. Montage Technology missed analyst forecasts, with revenues of CN¥2.3b and statutory earnings per share (EPS) of CN¥0.40, falling short by 2.9% and 7.5% respectively. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Montage Technology

Taking into account the latest results, the most recent consensus for Montage Technology from eleven analysts is for revenues of CN¥4.09b in 2024. If met, it would imply a sizeable 79% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 196% to CN¥1.17. In the lead-up to this report, the analysts had been modelling revenues of CN¥4.17b and earnings per share (EPS) of CN¥1.19 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at CN¥73.35. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Montage Technology, with the most bullish analyst valuing it at CN¥100.00 and the most bearish at CN¥60.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Montage Technology's rate of growth is expected to accelerate meaningfully, with the forecast 79% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 13% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 23% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Montage Technology to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at CN¥73.35, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Montage Technology analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Montage Technology you should know about.

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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.