Earnings Update: Alchip Technologies, Limited (TWSE:3661) Just Reported Its Second-Quarter Results And Analysts Are Updating Their Forecasts

The quarterly results for Alchip Technologies, Limited (TWSE:3661) were released last week, making it a good time to revisit its performance. It was a credible result overall, with revenues of NT$14b and statutory earnings per share of NT$19.38 both in line with analyst estimates, showing that Alchip Technologies is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Alchip Technologies

Taking into account the latest results, the consensus forecast from Alchip Technologies' twelve analysts is for revenues of NT$52.0b in 2024. This reflects a substantial 27% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 29% to NT$78.22. Yet prior to the latest earnings, the analysts had been anticipated revenues of NT$49.1b and earnings per share (EPS) of NT$81.32 in 2024. So it's pretty clear consensus is mixed on Alchip Technologies after the latest results; whilethe analysts lifted revenue numbers, they also administered a minor downgrade to per-share earnings expectations.

There's been no major changes to the price target of NT$4,013, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Alchip Technologies analyst has a price target of NT$5,400 per share, while the most pessimistic values it at NT$3,100. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Alchip Technologies' growth to accelerate, with the forecast 62% annualised growth to the end of 2024 ranking favourably alongside historical growth of 45% 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 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Alchip Technologies to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Alchip Technologies. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Alchip Technologies going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 3 warning signs for Alchip Technologies you should be aware of, and 1 of them can't be ignored.

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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.