RichWave Technology Corporation Just Reported A Surprise Loss: Here's What Analysts Think Will Happen Next

Last week, you might have seen that RichWave Technology Corporation (TWSE:4968) released its quarterly result to the market. The early response was not positive, with shares down 5.9% to NT$159 in the past week. Revenues fell 7.5% short of expectations, at NT$909m. Earnings correspondingly dipped, with RichWave Technology reporting a statutory loss of NT$0.19 per share, whereas the analysts had previously modelled a profit in this period. 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 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

Taking into account the latest results, the current consensus from RichWave Technology's five analysts is for revenues of NT$4.98b in 2025. This would reflect a major 36% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 904% to NT$5.79. In the lead-up to this report, the analysts had been modelling revenues of NT$5.13b and earnings per share (EPS) of NT$7.41 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

The consensus price target fell 9.9% to NT$223, with the weaker earnings outlook clearly leading valuation estimates. 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. The most optimistic RichWave Technology analyst has a price target of NT$265 per share, while the most pessimistic values it at NT$173. 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 RichWave Technology 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. One thing stands out from these estimates, which is that RichWave Technology is forecast to grow faster in the future than it has in the past, with revenues expected to display 28% annualised growth until the end of 2025. If achieved, this would be a much better result than the 4.8% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 17% per year. Not only are RichWave Technology's revenues expected to improve, it seems that the analysts are also expecting it 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 RichWave Technology. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.