ASMPT Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

There's been a major selloff in ASMPT Limited (HKG:522) shares in the week since it released its second-quarter report, with the stock down 30% to HK$79.85. It looks like a pretty bad result, all things considered. Although revenues of HK$3.3b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 40% to hit HK$0.33 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for ASMPT

Taking into account the latest results, ASMPT's 20 analysts currently expect revenues in 2024 to be HK$13.3b, approximately in line with the last 12 months. Statutory earnings per share are predicted to jump 114% to HK$2.09. Yet prior to the latest earnings, the analysts had been anticipated revenues of HK$15.2b and earnings per share (EPS) of HK$3.15 in 2024. Indeed, we can see that the analysts are a lot more bearish about ASMPT's prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.

The consensus price target fell 6.9% to HK$113, with the weaker earnings outlook clearly leading valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on ASMPT, with the most bullish analyst valuing it at HK$150 and the most bearish at HK$80.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.2% by the end of 2024. This indicates a significant reduction from annual growth of 0.7% 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 13% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - ASMPT is expected to lag 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. 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. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on ASMPT. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple ASMPT analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for ASMPT that you should be aware of.

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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.

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