Well Chip Group Berhad Just Beat EPS By 23%: Here's What Analysts Think Will Happen Next

Well Chip Group Berhad (KLSE:WELLCHIP) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks like a credible result overall - although revenues of RM222m were what the analysts expected, Well Chip Group Berhad surprised by delivering a (statutory) profit of RM0.097 per share, an impressive 23% above what was forecast. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Well Chip Group Berhad

Taking into account the latest results, the consensus forecast from Well Chip Group Berhad's two analysts is for revenues of RM236.2m in 2025. This reflects a modest 6.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 12% to RM0.093. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM264.5m and earnings per share (EPS) of RM0.10 in 2025. Indeed, we can see that sentiment has declined measurably after results came out, with a real cut to revenue estimates and a small dip in EPS estimates to boot.

Despite the cuts to forecast earnings, there was no real change to the RM1.76 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Well Chip Group Berhad's revenue growth is expected to slow, with the forecast 6.3% annualised growth rate until the end of 2025 being well below the historical 22% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 20% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Well Chip Group Berhad.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Well Chip Group Berhad. 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. The consensus price target held steady at RM1.76, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Well Chip Group Berhad. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.

It is also worth noting that we have found 1 warning sign for Well Chip Group Berhad that you need to take into consideration.

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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.