Earnings Miss: Accton Technology Corporation Missed EPS By 19% And Analysts Are Revising Their Forecasts

It's been a good week for Accton Technology Corporation (TWSE:2345) shareholders, because the company has just released its latest third-quarter results, and the shares gained 5.6% to NT$584. Statutory earnings per share of NT$4.70 unfortunately missed expectations by 19%, although it was encouraging to see revenues of NT$28b exceed expectations by 4.0%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Accton Technology

Taking into account the latest results, the most recent consensus for Accton Technology from six analysts is for revenues of NT$114.9b in 2025. If met, it would imply a huge 23% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 37% to NT$23.89. Yet prior to the latest earnings, the analysts had been anticipated revenues of NT$113.7b and earnings per share (EPS) of NT$23.52 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at NT$669. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Accton Technology analyst has a price target of NT$700 per share, while the most pessimistic values it at NT$596. This is a very narrow spread of estimates, implying either that Accton Technology is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Accton Technology's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 12% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 16% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Accton Technology is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Accton Technology analysts - going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Accton Technology 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.