Macronix International Co., Ltd. (TWSE:2337) Analysts Are Pretty Bullish On The Stock After Recent Results

Macronix International Co., Ltd. (TWSE:2337) just released its latest second-quarter results and things are looking bullish. Results overall were solid, with revenues arriving 2.0% better than analyst forecasts at NT$6.5b. Higher revenues also resulted in substantially lower statutory losses which, at NT$0.15 per share, were 2.0% smaller than the analysts expected. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Macronix International

Taking into account the latest results, the consensus forecast from Macronix International's five analysts is for revenues of NT$28.0b in 2024. This reflects a decent 11% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 59% to NT$0.62. Before this earnings announcement, the analysts had been modelling revenues of NT$27.8b and losses of NT$1.39 per share in 2024. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a very favorable reduction to losses per share in particular.

These new estimates led to the consensus price target rising 6.6% to NT$29.75, with lower forecast losses suggesting things could be looking up for Macronix International. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Macronix International analyst has a price target of NT$35.00 per share, while the most pessimistic values it at NT$23.50. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. For example, we noticed that Macronix International's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 23% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 2.9% 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 16% per year. So it looks like Macronix International is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. 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 also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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. At Simply Wall St, we have a full range of analyst estimates for Macronix International going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for Macronix International you should know about.

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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.

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