Results: Unimicron Technology Corp. Exceeded Expectations And The Consensus Has Updated Its Estimates

Simply Wall St
October 28, 2020

It's been a mediocre week for Unimicron Technology Corp. (TPE:3037) shareholders, with the stock dropping 13% to NT$74.90 in the week since its latest third-quarter results. Unimicron Technology reported NT$23b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of NT$1.09 beat expectations, being 9.2% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Unimicron Technology

TSEC:3037 Earnings and Revenue Growth October 28th 2020

Following the latest results, Unimicron Technology's eight analysts are now forecasting revenues of NT$99.2b in 2021. This would be a solid 13% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 58% to NT$4.86. Before this earnings report, the analysts had been forecasting revenues of NT$99.7b and earnings per share (EPS) of NT$5.03 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 5.2% to NT$101, suggesting the revised estimates are not indicative of a weaker long-term future for the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Unimicron Technology, with the most bullish analyst valuing it at NT$160 and the most bearish at NT$64.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Unimicron Technology's rate of growth is expected to accelerate meaningfully, with the forecast 13% revenue growth noticeably faster than its historical growth of 7.5%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.8% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Unimicron Technology is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Unimicron Technology. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Unimicron Technology going out to 2022, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with Unimicron Technology .

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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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