X-FAB Silicon Foundries SE (EPA:XFAB) Just Reported And Analysts Have Been Lifting Their Price Targets

It's been a pretty great week for X-FAB Silicon Foundries SE (EPA:XFAB) shareholders, with its shares surging 11% to €7.14 in the week since its latest second-quarter results. Results were overall in line with expectations, with the company breaking even at the statutory earnings per share (EPS) level on US$215m in revenue. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following the latest results, X-FAB Silicon Foundries' six analysts are now forecasting revenues of US$861.7m in 2025. This would be a reasonable 5.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 72% to US$0.40. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$833.4m and earnings per share (EPS) of US$0.52 in 2025. So it's pretty clear the analysts have mixed opinions on X-FAB Silicon Foundries after the latest results; even though they upped their revenue numbers, it came at the cost of a pretty serious reduction to per-share earnings expectations.

View our latest analysis for X-FAB Silicon Foundries

Curiously, the consensus price target rose 20% to €7.36. We can only conclude that the forecast revenue growth is expected to offset the impact of the expected fall in earnings. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on X-FAB Silicon Foundries, with the most bullish analyst valuing it at €7.99 and the most bearish at €6.99 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 12% growth on an annualised basis. That is in line with its 12% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 8.9% annually. So it's pretty clear that X-FAB Silicon Foundries is forecast to grow substantially faster than its 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. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on X-FAB Silicon Foundries. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for X-FAB Silicon Foundries going out to 2027, and you can see them free on our platform here..

You still need to take note of risks, for example - X-FAB Silicon Foundries has 2 warning signs (and 1 which is a bit concerning) we think you should know about.

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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.