Hiwin Technologies Corporation (TWSE:2049) Just Reported Earnings, And Analysts Cut Their Target Price

Last week saw the newest quarterly earnings release from Hiwin Technologies Corporation (TWSE:2049), an important milestone in the company's journey to build a stronger business. It looks like the results were a bit of a negative overall. While revenues of NT$6.2b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.6% to hit NT$1.64 per share. 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.

Check out our latest analysis for Hiwin Technologies

Following the latest results, Hiwin Technologies' 13 analysts are now forecasting revenues of NT$24.5b in 2024. This would be a reasonable 2.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 11% to NT$6.07. Before this earnings report, the analysts had been forecasting revenues of NT$25.3b and earnings per share (EPS) of NT$6.92 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 5.6% to NT$231. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Hiwin Technologies at NT$312 per share, while the most bearish prices it at NT$155. 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.

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 2024 brings more of the same, according to the analysts, with revenue forecast to display 4.1% growth on an annualised basis. That is in line with its 4.6% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 15% per year. So although Hiwin Technologies is expected to maintain its revenue growth rate, it's forecast to grow slower than 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Hiwin Technologies going out to 2026, and you can see them free on our platform here..

It might also be worth considering whether Hiwin Technologies' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.