Holtek Semiconductor Inc. Reported A Surprise Loss, And Analysts Have Updated Their Forecasts

There's been a notable change in appetite for Holtek Semiconductor Inc. (TWSE:6202) shares in the week since its second-quarter report, with the stock down 18% to NT$45.65. The results don't look great, especially considering that the analysts had been forecasting a profit and Holtek Semiconductor delivered a statutory loss of NT$0.15 per share. Revenues of NT$683m did beat expectations by 4.1% though. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Holtek Semiconductor

Following the latest results, Holtek Semiconductor's three analysts are now forecasting revenues of NT$2.55b in 2024. This would be a decent 13% improvement in revenue compared to the last 12 months. The statutory loss per share is expected to greatly reduce in the near future, narrowing 23% to NT$0.33. In the lead-up to this report, the analysts had been modelling revenues of NT$2.88b and earnings per share (EPS) of NT$0.18 in 2024. So we can see that the consensus has become notably more bearish on Holtek Semiconductor's outlook following these results, with a substantial drop in next year's revenue estimates. Furthermore, they expect the business to be loss-making next year, compared to their previous calls for a profit.

The consensus price target fell 10% to NT$60.00, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Holtek Semiconductor's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 29% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 7.1% a year 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 16% per year. Not only are Holtek Semiconductor'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 most important thing to take away is that the analysts are expecting Holtek Semiconductor to become unprofitable next year. 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 Holtek Semiconductor's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Holtek Semiconductor. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Holtek Semiconductor going out to 2025, and you can see them free on our platform here..

We also provide an overview of the Holtek Semiconductor Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.

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