Earnings Beat: Advantest Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Advantest Corporation (TSE:6857) just released its latest half-yearly results and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 15% higher than the analysts had forecast, at JP¥329b, while EPS were JP¥93.92 beating analyst models by 70%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Advantest

Taking into account the latest results, the current consensus from Advantest's 15 analysts is for revenues of JP¥645.5b in 2025. This would reflect a reasonable 7.9% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 28% to JP¥183. In the lead-up to this report, the analysts had been modelling revenues of JP¥619.1b and earnings per share (EPS) of JP¥157 in 2025. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a solid gain to earnings per share in particular.

It will come as no surprise to learn that the analysts have increased their price target for Advantest 9.3% to JP¥8,896on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Advantest analyst has a price target of JP¥11,100 per share, while the most pessimistic values it at JP¥6,000. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. We can infer from the latest estimates that forecasts expect a continuation of Advantest'shistorical trends, as the 16% annualised revenue growth to the end of 2025 is roughly in line with the 17% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 11% annually. So it's pretty clear that Advantest is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Advantest's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 forecasts for Advantest going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Advantest 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.