Fortune Electric Co., Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

Investors in Fortune Electric Co., Ltd. (TWSE:1519) had a good week, as its shares rose 7.9% to close at NT$673 following the release of its quarterly results. It was not a great result overall. Although revenues beat expectations, hitting NT$4.6b, statutory earnings missed analyst forecasts by 12%, coming in at just NT$3.11 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Fortune Electric

Following the latest results, Fortune Electric's four analysts are now forecasting revenues of NT$20.0b in 2024. This would be a decent 18% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 29% to NT$14.97. Before this earnings report, the analysts had been forecasting revenues of NT$18.7b and earnings per share (EPS) of NT$14.90 in 2024. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a slight bump in to revenue forecasts.

It may not be a surprise to see thatthe analysts have reconfirmed their price target of NT$939, implying that the uplift in revenue is not expected to greatly contribute to Fortune Electric's valuation in the near term. 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. Currently, the most bullish analyst values Fortune Electric at NT$1,100 per share, while the most bearish prices it at NT$773. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Fortune Electric's past performance and to peers in the same industry. It's clear from the latest estimates that Fortune Electric's rate of growth is expected to accelerate meaningfully, with the forecast 40% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 15% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Fortune Electric is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 Fortune Electric going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Fortune Electric has 1 warning sign we think 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.