VeriSilicon Microelectronics (Shanghai) Co., Ltd. (SHSE:688521) Second-Quarter Results: Here's What Analysts Are Forecasting For This Year

VeriSilicon Microelectronics (Shanghai) Co., Ltd. (SHSE:688521) missed earnings with its latest second-quarter results, disappointing overly-optimistic forecasters. Revenues missed expectations somewhat, coming in at CN¥614m, but statutory earnings fell catastrophically short, with a loss of CN¥0.16 some 433% larger than what the analysts had predicted. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for VeriSilicon Microelectronics (Shanghai)

Taking into account the latest results, the current consensus from VeriSilicon Microelectronics (Shanghai)'s eight analysts is for revenues of CN¥2.55b in 2024. This would reflect a substantial 22% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 100% to CN¥0.0015. Yet prior to the latest earnings, the analysts had been forecasting revenues of CN¥2.61b and losses of CN¥0.073 per share in 2024. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a very promising decrease in losses per share in particular.

The consensus price target was broadly unchanged at CN¥45.50, implying that the business is performing roughly in line with expectations, despite adjustments to both revenue and earnings estimates. 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 VeriSilicon Microelectronics (Shanghai) at CN¥70.00 per share, while the most bearish prices it at CN¥24.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the VeriSilicon Microelectronics (Shanghai)'s past performance and to peers in the same industry. The analysts are definitely expecting VeriSilicon Microelectronics (Shanghai)'s growth to accelerate, with the forecast 50% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.7% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 22% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that VeriSilicon Microelectronics (Shanghai) is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than 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¥45.50, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for VeriSilicon Microelectronics (Shanghai) going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for VeriSilicon Microelectronics (Shanghai) that we have uncovered.

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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.