Earnings Update: Here's Why Analysts Just Lifted Their MediaTek Inc. (TWSE:2454) Price Target To NT$1,634

As you might know, MediaTek Inc. (TWSE:2454) recently reported its yearly numbers. MediaTek reported in line with analyst predictions, delivering revenues of NT$531b and statutory earnings per share of NT$66.92, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on MediaTek after the latest results.

View our latest analysis for MediaTek

Following the latest results, MediaTek's 20 analysts are now forecasting revenues of NT$609.1b in 2025. This would be a decent 15% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 7.3% to NT$71.61. Before this earnings report, the analysts had been forecasting revenues of NT$595.4b and earnings per share (EPS) of NT$71.26 in 2025. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small increase to to revenue forecasts.

The analysts increased their price target 9.1% to NT$1,634, perhaps signalling that higher revenues are a strong leading indicator for MediaTek's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic MediaTek analyst has a price target of NT$2,000 per share, while the most pessimistic values it at NT$1,275. 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.

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. It's clear from the latest estimates that MediaTek's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 12% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that MediaTek is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for MediaTek going out to 2027, 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 MediaTek that 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.