Nanya Technology Corporation (TWSE:2408) Just Released Its Second-Quarter Earnings: Here's What Analysts Think

Shareholders might have noticed that Nanya Technology Corporation (TWSE:2408) filed its second-quarter result this time last week. The early response was not positive, with shares down 7.3% to NT$68.50 in the past week. Revenues of NT$9.9b came in 4.5% below estimates, but statutory losses were slightly better than expected, at NT$0.26 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Nanya Technology

Taking into account the latest results, the consensus forecast from Nanya Technology's twelve analysts is for revenues of NT$46.2b in 2024. This reflects a sizeable 29% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Nanya Technology forecast to report a statutory profit of NT$0.37 per share. Before this earnings report, the analysts had been forecasting revenues of NT$48.6b and earnings per share (EPS) of NT$0.66 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the NT$85.18 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 Nanya Technology analyst has a price target of NT$95.00 per share, while the most pessimistic values it at NT$58.00. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Nanya Technology's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 66% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 9.5% 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. Not only are Nanya Technology's revenues expected to improve, it seems that the analysts are also expecting it 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 Nanya Technology. They also downgraded Nanya Technology's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at NT$85.18, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Nanya Technology. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Nanya Technology analysts - going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Nanya Technology's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com