Chroma ATE Inc. Just Recorded A 16% EPS Beat: Here's What Analysts Are Forecasting Next

It's been a good week for Chroma ATE Inc. (TWSE:2360) shareholders, because the company has just released its latest second-quarter results, and the shares gained 5.5% to NT$299. It looks like a credible result overall - although revenues of NT$5.5b were in line with what the analysts predicted, Chroma ATE surprised by delivering a statutory profit of NT$3.31 per share, a notable 16% above expectations. 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.

View our latest analysis for Chroma ATE

After the latest results, the ten analysts covering Chroma ATE are now predicting revenues of NT$21.2b in 2024. If met, this would reflect a credible 7.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 17% to NT$12.08. In the lead-up to this report, the analysts had been modelling revenues of NT$21.4b and earnings per share (EPS) of NT$11.77 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.4% to NT$358. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Chroma ATE analyst has a price target of NT$400 per share, while the most pessimistic values it at NT$300. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Chroma ATE is an easy business to forecast or the the analysts are all using similar 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. The analysts are definitely expecting Chroma ATE's growth to accelerate, with the forecast 15% annualised growth to the end of 2024 ranking favourably alongside historical growth of 8.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Chroma ATE is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Chroma ATE following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 estimates - from multiple Chroma ATE analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Chroma ATE has 2 warning signs we think you should be aware 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com