These Analysts Just Made An Downgrade To Their Holtek Semiconductor Inc. (TWSE:6202) EPS Forecasts

The latest analyst coverage could presage a bad day for Holtek Semiconductor Inc. (TWSE:6202), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

After this downgrade, Holtek Semiconductor's three analysts are now forecasting revenues of NT$2.5b in 2024. This would be a meaningful 12% improvement in sales compared to the last 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of NT$0.33 per share in 2024. Before this latest update, the analysts had been forecasting revenues of NT$2.9b 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 with these numbers, making a measurable cut to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

See our latest analysis for Holtek Semiconductor

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.

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. For example, we noticed that Holtek Semiconductor's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 25% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 3.5% 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. So it looks like Holtek Semiconductor is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that analysts are expecting Holtek Semiconductor to become unprofitable this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Holtek Semiconductor.

Still, the long-term prospects of the business are much more relevant than next year's earnings. 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.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com