Visco Vision Inc. Just Missed Earnings - But Analysts Have Updated Their Models

It's been a mediocre week for Visco Vision Inc. (TWSE:6782) shareholders, with the stock dropping 14% to NT$209 in the week since its latest second-quarter results. Revenue of NT$905m surpassed estimates by 4.0%, although statutory earnings per share missed badly, coming in 21% below expectations at NT$2.29 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Visco Vision

Taking into account the latest results, the current consensus from Visco Vision's five analysts is for revenues of NT$3.46b in 2024. This would reflect a meaningful 13% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 49% to NT$12.26. In the lead-up to this report, the analysts had been modelling revenues of NT$3.56b and earnings per share (EPS) of NT$11.51 in 2024. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

The consensus has made no major changes to the price target of NT$324, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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. The most optimistic Visco Vision analyst has a price target of NT$398 per share, while the most pessimistic values it at NT$280. 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 Visco Vision shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Visco Vision's growth to accelerate, with the forecast 28% annualised growth to the end of 2024 ranking favourably alongside historical growth of 14% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Visco Vision is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Visco Vision's earnings potential next year. They also downgraded Visco Vision's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Yet - earnings are more important to the intrinsic value of the business. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Visco Vision going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Visco Vision 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.