Results: X-FAB Silicon Foundries SE Beat Earnings Expectations And Analysts Now Have New Forecasts

There's been a notable change in appetite for X-FAB Silicon Foundries SE (EPA:XFAB) shares in the week since its quarterly report, with the stock down 10% to €4.65. Revenues were US$206m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.20, an impressive 67% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for X-FAB Silicon Foundries

Taking into account the latest results, the consensus forecast from X-FAB Silicon Foundries' six analysts is for revenues of US$933.4m in 2025. This reflects an okay 7.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to sink 10% to US$0.74 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$960.4m and earnings per share (EPS) of US$0.81 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

Despite the cuts to forecast earnings, there was no real change to the €7.11 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. There are some variant perceptions on X-FAB Silicon Foundries, with the most bullish analyst valuing it at €8.13 and the most bearish at €6.04 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting X-FAB Silicon Foundries is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that X-FAB Silicon Foundries' revenue growth is expected to slow, with the forecast 6.2% annualised growth rate until the end of 2025 being well below the historical 15% p.a. growth over the last five years. Compare this to the 6 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.8% per year. Factoring in the forecast slowdown in growth, it looks like X-FAB Silicon Foundries is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple X-FAB Silicon Foundries 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 3 warning signs for X-FAB Silicon Foundries (of which 1 is a bit unpleasant!) you should know about.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.