Earnings Miss: Lite-On Technology Corporation Missed EPS By 9.4% And Analysts Are Revising Their Forecasts

It's shaping up to be a tough period for Lite-On Technology Corporation (TWSE:2301), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. Lite-On Technology missed analyst forecasts, with revenues of NT$29b and statutory earnings per share (EPS) of NT$1.03, falling short by 5.4% and 9.4% respectively. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Lite-On Technology

Taking into account the latest results, Lite-On Technology's eight analysts currently expect revenues in 2024 to be NT$144.8b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be NT$6.21, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of NT$150.7b and earnings per share (EPS) of NT$6.68 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The consensus price target fell 8.3% to NT$120, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Lite-On Technology, with the most bullish analyst valuing it at NT$159 and the most bearish at NT$88.80 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2024. That would be a definite improvement, given that the past five years have seen revenue shrink 3.6% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 17% annually. Although Lite-On Technology's revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Lite-On Technology. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Lite-On Technology going out to 2026, and you can see them free on our platform here.

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

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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.