Earnings Miss: Sunonwealth Electric Machine Industry Co., Ltd. Missed EPS By 7.0% And Analysts Are Revising Their Forecasts

Sunonwealth Electric Machine Industry Co., Ltd. (TWSE:2421) just released its latest first-quarter report and things are not looking great. Sunonwealth Electric Machine Industry missed analyst forecasts, with revenues of NT$3.1b and statutory earnings per share (EPS) of NT$1.19, falling short by 3.8% and 7.0% respectively. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Sunonwealth Electric Machine Industry

Taking into account the latest results, the current consensus from Sunonwealth Electric Machine Industry's five analysts is for revenues of NT$15.0b in 2024. This would reflect a solid 16% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 30% to NT$6.60. Yet prior to the latest earnings, the analysts had been anticipated revenues of NT$15.2b and earnings per share (EPS) of NT$7.03 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at NT$146, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on Sunonwealth Electric Machine Industry, with the most bullish analyst valuing it at NT$175 and the most bearish at NT$105 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Sunonwealth Electric Machine Industry shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sunonwealth Electric Machine Industry's past performance and to peers in the same industry. The analysts are definitely expecting Sunonwealth Electric Machine Industry's growth to accelerate, with the forecast 22% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Sunonwealth Electric Machine Industry to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sunonwealth Electric Machine Industry. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Sunonwealth Electric Machine Industry. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Sunonwealth Electric Machine Industry 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 Sunonwealth Electric Machine Industry 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.