Advanced Energy Solution Holding Co., Ltd. (TWSE:6781) Analysts Are Reducing Their Forecasts For This Year

One thing we could say about the analysts on Advanced Energy Solution Holding Co., Ltd. (TWSE:6781) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the latest downgrade, the three analysts covering Advanced Energy Solution Holding provided consensus estimates of NT$9.2b revenue in 2024, which would reflect a small 2.7% decline on its sales over the past 12 months. Statutory earnings per share are presumed to accumulate 3.7% to NT$22.05. Before this latest update, the analysts had been forecasting revenues of NT$11b and earnings per share (EPS) of NT$27.91 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Advanced Energy Solution Holding

The consensus price target fell 7.9% to NT$743, with the weaker earnings outlook clearly leading analyst valuation estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 3.6% by the end of 2024. This indicates a significant reduction from annual growth of 3.9% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 15% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Advanced Energy Solution Holding is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Advanced Energy Solution Holding. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Advanced Energy Solution Holding's revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

That said, the analysts might have good reason to be negative on Advanced Energy Solution Holding, given concerns around earnings quality. Learn more, and discover the 1 other risk we've identified, for free on our 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.