ASUSTeK Computer Inc. Just Missed Earnings - But Analysts Have Updated Their Models

ASUSTeK Computer Inc. (TWSE:2357) shareholders are probably feeling a little disappointed, since its shares fell 7.5% to NT$408 in the week after its latest yearly results. Revenues of NT$482b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at NT$21.36, missing estimates by 6.8%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for ASUSTeK Computer

Following the latest results, ASUSTeK Computer's eleven analysts are now forecasting revenues of NT$548.6b in 2024. This would be a solid 14% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 37% to NT$29.49. Yet prior to the latest earnings, the analysts had been anticipated revenues of NT$548.9b and earnings per share (EPS) of NT$31.44 in 2024. 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.

It might be a surprise to learn that the consensus price target was broadly unchanged at NT$482, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 ASUSTeK Computer, with the most bullish analyst valuing it at NT$666 and the most bearish at NT$400 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 clear from the latest estimates that ASUSTeK Computer's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 10% 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 ASUSTeK Computer is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for ASUSTeK Computer going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for ASUSTeK Computer that you need to be mindful of.

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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.