Results: RichWave Technology Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a good week for RichWave Technology Corporation (TWSE:4968) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.1% to NT$173. Revenues were NT$861m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at NT$0.31, an impressive 41% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for RichWave Technology

After the latest results, the four analysts covering RichWave Technology are now predicting revenues of NT$3.98b in 2024. If met, this would reflect a major 24% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with RichWave Technology forecast to report a statutory profit of NT$3.67 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of NT$4.37b and earnings per share (EPS) of NT$3.79 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

It'll come as no surprise then, to learn that the analysts have cut their price target 14% to NT$193. 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. There are some variant perceptions on RichWave Technology, with the most bullish analyst valuing it at NT$250 and the most bearish at NT$155 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the RichWave Technology's past performance and to peers in the same industry. It's clear from the latest estimates that RichWave Technology's rate of growth is expected to accelerate meaningfully, with the forecast 33% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.4% 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 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that RichWave Technology is expected to grow much faster than its 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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 RichWave Technology's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple RichWave Technology analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for RichWave Technology that you should be aware of.

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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.