Raydium Semiconductor Corporation Just Recorded A 8.6% EPS Beat: Here's What Analysts Are Forecasting Next

Last week, you might have seen that Raydium Semiconductor Corporation (TWSE:3592) released its quarterly result to the market. The early response was not positive, with shares down 6.9% to NT$342 in the past week. The result was positive overall - although revenues of NT$6.5b were in line with what the analysts predicted, Raydium Semiconductor surprised by delivering a statutory profit of NT$7.74 per share, modestly greater than expected. 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. 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 Raydium Semiconductor

Taking into account the latest results, the consensus forecast from Raydium Semiconductor's five analysts is for revenues of NT$25.3b in 2024. This reflects a meaningful 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 9.9% to NT$28.96. In the lead-up to this report, the analysts had been modelling revenues of NT$25.0b and earnings per share (EPS) of NT$29.58 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target fell 17% to NT$398, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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. There are some variant perceptions on Raydium Semiconductor, with the most bullish analyst valuing it at NT$470 and the most bearish at NT$340 per share. 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.

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 clear from the latest estimates that Raydium Semiconductor's rate of growth is expected to accelerate meaningfully, with the forecast 27% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 9.4% p.a. 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 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Raydium Semiconductor 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Raydium Semiconductor's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Raydium Semiconductor analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Raydium Semiconductor , and understanding this should be part of your investment process.

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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.