Earnings Miss: SG Micro Corp Missed EPS By 45% And Analysts Are Revising Their Forecasts

It's been a pretty great week for SG Micro Corp (SZSE:300661) shareholders, with its shares surging 14% to CN¥76.87 in the week since its latest quarterly results. Results overall were not great, with earnings of CN¥0.12 per share falling drastically short of analyst expectations. Meanwhile revenues hit CN¥729m and were slightly better than forecasts. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for SG Micro

Taking into account the latest results, the current consensus from SG Micro's 14 analysts is for revenues of CN¥3.25b in 2024. This would reflect a meaningful 15% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 67% to CN¥1.08. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.41b and earnings per share (EPS) of CN¥1.38 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

The analysts made no major changes to their price target of CN¥82.81, suggesting the downgrades are not expected to have a long-term impact on SG Micro's valuation. 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 SG Micro, with the most bullish analyst valuing it at CN¥99.59 and the most bearish at CN¥56.50 per share. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that SG Micro's revenue growth is expected to slow, with the forecast 20% annualised growth rate until the end of 2024 being well below the historical 30% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 23% annually. So it's pretty clear that, while SG Micro's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for SG Micro. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for SG Micro 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 1 warning sign for SG Micro that you should be aware of.

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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.