Elmos Semiconductor SE (ETR:ELG) just released its third-quarter report and things are looking bullish. Revenues and losses per share were both better than expected, with revenues of €41m leading estimates by 5.0%. Statutory losses were smaller than the analystsexpected, coming in at €0.34 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Elmos Semiconductor from five analysts is for revenues of €265.7m in 2021 which, if met, would be a notable 11% increase on its sales over the past 12 months. Statutory earnings per share are predicted to jump 47% to €1.05. Before this earnings report, the analysts had been forecasting revenues of €256.4m and earnings per share (EPS) of €0.88 in 2021. So it seems there's been a definite increase in optimism about Elmos Semiconductor's future following the latest results, with a solid gain to the earnings per share forecasts in particular.
It will come as no surprise to learn that the analysts have increased their price target for Elmos Semiconductor 6.9% to €24.90on the back of these upgrades. 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. Currently, the most bullish analyst values Elmos Semiconductor at €29.00 per share, while the most bearish prices it at €21.00. 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.
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. It's clear from the latest estimates that Elmos Semiconductor's rate of growth is expected to accelerate meaningfully, with the forecast 11% revenue growth noticeably faster than its historical growth of 4.2%p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 9.2% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Elmos Semiconductor is expected to grow at about the same rate as the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Elmos Semiconductor's earnings potential next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Elmos Semiconductor will grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Elmos Semiconductor going out to 2024, 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 Elmos Semiconductor , and understanding these should be part of your investment process.
If you’re looking to trade Elmos Semiconductor, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
This article by Simply Wall St is general in nature. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.