Results: Siltronic AG Exceeded Expectations And The Consensus Has Updated Its Estimates

Siltronic AG (ETR:WAF) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues were €344m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at €0.86, an impressive 4,414% ahead of estimates. 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. 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 Siltronic

Taking into account the latest results, the current consensus, from the ten analysts covering Siltronic, is for revenues of €1.42b in 2024. This implies a measurable 2.3% reduction in Siltronic's revenue over the past 12 months. Statutory earnings per share are expected to dive 73% to €1.32 in the same period. Yet prior to the latest earnings, the analysts had been forecasting revenues of €1.52b and losses of €0.53 per share in 2024. While we note the small dip in to the revenue outlook, the analysts are now also predicting for the business to become profitable next year - sooner than previously forecast - which looks like a pretty clear lift in expectations.

The analysts have cut their price target 5.7% to €89.20per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Siltronic at €110 per share, while the most bearish prices it at €55.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We would highlight that revenue is expected to reverse, with a forecast 3.0% annualised decline to the end of 2024. That is a notable change from historical growth of 5.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Siltronic is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting Siltronic to become profitable next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings per share are more important to value creation for shareholders. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 estimates - from multiple Siltronic analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Siltronic you should be aware of, and 2 of them make us uncomfortable.

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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.