Radiant Opto-Electronics Corporation Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Radiant Opto-Electronics Corporation (TWSE:6176) last week reported its latest annual results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was not a great result overall. While revenues of NT$44b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 14% to hit NT$11.35 per share. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Radiant Opto-Electronics

Taking into account the latest results, the consensus forecast from Radiant Opto-Electronics' six analysts is for revenues of NT$49.6b in 2024. This reflects a solid 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 13% to NT$12.77. In the lead-up to this report, the analysts had been modelling revenues of NT$50.6b and earnings per share (EPS) of NT$12.05 in 2024. So the consensus seems to have become somewhat more optimistic on Radiant Opto-Electronics' earnings potential following these results.

The consensus price target was unchanged at NT$135, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Radiant Opto-Electronics, with the most bullish analyst valuing it at NT$173 and the most bearish at NT$80.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 Radiant Opto-Electronics is forecast to grow faster in the future than it has in the past, with revenues expected to display 12% annualised growth until the end of 2024. If achieved, this would be a much better result than the 1.9% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 15% annually. So it looks like Radiant Opto-Electronics is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Radiant Opto-Electronics' earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at NT$135, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Radiant Opto-Electronics. Long-term earnings power is much more important than next year's profits. We have forecasts for Radiant Opto-Electronics going out to 2025, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Radiant Opto-Electronics you should know about.

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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.