Earnings Miss: Faraday Technology Corporation Missed EPS By 19% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Faraday Technology Corporation (TWSE:3035) filed its quarterly result this time last week. The early response was not positive, with shares down 9.1% to NT$235 in the past week. It was not a great result overall. While revenues of NT$2.9b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 19% to hit NT$1.01 per share. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Faraday Technology

Following the latest results, Faraday Technology's nine analysts are now forecasting revenues of NT$15.7b in 2025. This would be a substantial 44% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 128% to NT$9.85. In the lead-up to this report, the analysts had been modelling revenues of NT$16.2b and earnings per share (EPS) of NT$11.00 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

The consensus price target fell 8.0% to NT$342, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Faraday Technology at NT$500 per share, while the most bearish prices it at NT$237. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Faraday Technology's past performance and to peers in the same industry. The analysts are definitely expecting Faraday Technology's growth to accelerate, with the forecast 34% annualised growth to the end of 2025 ranking favourably alongside historical growth of 20% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Faraday Technology to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded Faraday Technology's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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

It is also worth noting that we have found 3 warning signs for Faraday Technology that you need to take into consideration.

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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.