ASE Technology Holding Co., Ltd. Just Recorded A 12% EPS Beat: Here's What Analysts Are Forecasting Next

A week ago, ASE Technology Holding Co., Ltd. (TWSE:3711) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. ASE Technology Holding beat earnings, with revenues hitting NT$140b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 12%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for ASE Technology Holding

Taking into account the latest results, the consensus forecast from ASE Technology Holding's 16 analysts is for revenues of NT$608.0b in 2024. This reflects a modest 3.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 6.0% to NT$7.76. In the lead-up to this report, the analysts had been modelling revenues of NT$620.6b and earnings per share (EPS) of NT$8.79 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

What's most unexpected is that the consensus price target rose 11% to NT$168, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. 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 ASE Technology Holding analyst has a price target of NT$213 per share, while the most pessimistic values it at NT$122. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await ASE Technology Holding shareholders.

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 pretty clear that there is an expectation that ASE Technology Holding's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.0% growth on an annualised basis. This is compared to a historical growth rate of 9.4% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 16% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than ASE Technology Holding.

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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than 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 in mind, we wouldn't be too quick to come to a conclusion on ASE Technology Holding. Long-term earnings power is much more important than next year's profits. We have forecasts for ASE Technology Holding going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for ASE Technology Holding that we have uncovered.

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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.

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