Earnings Update: Raydium Semiconductor Corporation (TWSE:3592) Just Reported And Analysts Are Boosting Their Estimates

Investors in Raydium Semiconductor Corporation (TWSE:3592) had a good week, as its shares rose 3.6% to close at NT$477 following the release of its annual results. It was a credible result overall, with revenues of NT$18b and statutory earnings per share of NT$18.78 both in line with analyst estimates, showing that Raydium Semiconductor is executing in line with expectations. 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 Raydium Semiconductor after the latest results.

View our latest analysis for Raydium Semiconductor

Taking into account the latest results, the most recent consensus for Raydium Semiconductor from five analysts is for revenues of NT$23.6b in 2024. If met, it would imply a huge 29% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 53% to NT$29.10. Yet prior to the latest earnings, the analysts had been anticipated revenues of NT$21.4b and earnings per share (EPS) of NT$24.53 in 2024. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 21% to NT$468per share. 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. The most optimistic Raydium Semiconductor analyst has a price target of NT$500 per share, while the most pessimistic values it at NT$435. This is a very narrow spread of estimates, implying either that Raydium Semiconductor is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Raydium Semiconductor's growth to accelerate, with the forecast 29% annualised growth to the end of 2024 ranking favourably alongside historical growth of 12% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Raydium Semiconductor is expected to grow much faster than its industry.

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 Raydium Semiconductor following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Raydium Semiconductor going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - Raydium Semiconductor has 2 warning signs (and 1 which is a bit concerning) we think 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.