Earnings Beat: Solar Applied Materials Technology Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

As you might know, Solar Applied Materials Technology Corporation (GTSM:1785) recently reported its annual numbers. The result was positive overall - although revenues of NT$27b were in line with what the analyst predicted, Solar Applied Materials Technology surprised by delivering a statutory profit of NT$1.69 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analyst is expecting for next year.

Check out our latest analysis for Solar Applied Materials Technology

Taking into account the latest results, the current consensus from Solar Applied Materials Technology's lone analyst is for revenues of NT$30.3b in 2021, which would reflect a meaningful 14% increase on its sales over the past 12 months. Statutory earnings per share are predicted to jump 30% to NT$2.20. In the lead-up to this report, the analyst had been modelling revenues of NT$27.6b and earnings per share (EPS) of NT$2.48 in 2021. So it's pretty clear the analyst has mixed opinions on Solar Applied Materials Technology after the latest results; even though they upped their revenue numbers, it came at the cost of a real cut to per-share earnings expectations.

There's been no major changes to the price target of NT$51.00, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation.

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. For example, we noticed that Solar Applied Materials Technology's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 14% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 15% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 8.8% per year. Not only are Solar Applied Materials Technology's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Solar Applied Materials Technology. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at NT$51.00, with the latest estimates not enough to have an impact on their price target.

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 analyst estimates for Solar Applied Materials Technology going out as far as 2022, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 4 warning signs with Solar Applied Materials Technology (at least 1 which is significant) , and understanding these should be part of your investment process.

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This article by Simply Wall St is general in nature. 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.
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