Innodisk Corporation Just Missed EPS By 9.0%: Here's What Analysts Think Will Happen Next

Innodisk Corporation (GTSM:5289) missed earnings with its latest annual results, disappointing overly-optimistic forecasts. Results look to have been somewhat negative - revenue fell 2.8% short of analyst estimates at NT$7.2b, and statutory earnings of NT$11.21 per share missed forecasts by 9.0%. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Innodisk

Taking into account the latest results, the consensus forecast from Innodisk's lone analyst is for revenues of NT$7.54b in 2021, which would reflect a satisfactory 5.4% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to expand 12% to NT$12.79. Yet prior to the latest earnings, the analyst had been anticipated revenues of NT$8.30b and earnings per share (EPS) of NT$15.45 in 2021. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

The analyst made no major changes to their price target of NT$190, suggesting the downgrades are not expected to have a long-term impact on Innodisk's valuation.

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. It's pretty clear that there is an expectation that Innodisk's revenue growth will slow down substantially, with revenues next year expected to grow 5.4%, compared to a historical growth rate of 12% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.1% next year. Factoring in the forecast slowdown in growth, it looks like Innodisk is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Innodisk. Sadly, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target held steady at NT$190, with the latest estimates not enough to have an impact on their price target.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Innodisk going out as far as 2022, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Innodisk that you need to take into consideration.

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This article by Simply Wall St is general in nature. 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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