X-FAB Silicon Foundries SE (EPA:XFAB) Just Missed Earnings: Here's What Analysts Think Will Happen Next

X-FAB Silicon Foundries SE (EPA:XFAB) just released its latest quarterly report and things are not looking great. X-FAB Silicon Foundries missed analyst forecasts, with revenues of US$219m and statutory earnings per share (EPS) of US$0.18, falling short by 5.8% and 5.3% respectively. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for X-FAB Silicon Foundries

After the latest results, the seven analysts covering X-FAB Silicon Foundries are now predicting revenues of US$943.8m in 2024. If met, this would reflect a credible 3.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to fall 19% to US$0.88 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$956.6m and earnings per share (EPS) of US$1.03 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

The average price target fell 8.7% to €10.17, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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 X-FAB Silicon Foundries at €13.16 per share, while the most bearish prices it at €7.49. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await X-FAB Silicon Foundries shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the X-FAB Silicon Foundries' past performance and to peers in the same industry. It's pretty clear that there is an expectation that X-FAB Silicon Foundries' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.2% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that X-FAB Silicon Foundries is also expected to grow slower than other industry participants.

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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that X-FAB Silicon Foundries' revenue is expected to perform worse than the wider industry. 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.

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 forecasts for X-FAB Silicon Foundries going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.