King Yuan Electronics Co., Ltd. (TWSE:2449) Just Reported Earnings, And Analysts Cut Their Target Price

There's been a notable change in appetite for King Yuan Electronics Co., Ltd. (TWSE:2449) shares in the week since its quarterly report, with the stock down 10% to NT$85.00. It was a credible result overall, with revenues of NT$8.2b and statutory earnings per share of NT$1.12 both in line with analyst estimates, showing that King Yuan Electronics is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for King Yuan Electronics

Taking into account the latest results, the most recent consensus for King Yuan Electronics from nine analysts is for revenues of NT$34.5b in 2024. If met, it would imply a modest 3.2% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 49% to NT$7.34. In the lead-up to this report, the analysts had been modelling revenues of NT$37.9b and earnings per share (EPS) of NT$5.94 in 2024. Although the analysts have lowered their revenue forecasts, they've also made a very substantial lift in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

The consensus price target fell 12% to NT$90.78, with the analysts signalling that the weaker revenue outlook was a more powerful indicator than the upgraded EPS forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values King Yuan Electronics at NT$110 per share, while the most bearish prices it at NT$72.00. 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 King Yuan Electronics shareholders.

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. It's pretty clear that there is an expectation that King Yuan Electronics' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.2% growth on an annualised basis. This is compared to a historical growth rate of 8.6% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 15% per year. Factoring in the forecast slowdown in growth, it seems obvious that King Yuan Electronics is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards King Yuan Electronics following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of King Yuan Electronics' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for King Yuan Electronics going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for King Yuan Electronics that you should be aware of.

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

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.