Earnings Miss: Chroma ATE Inc. Missed EPS By 13% And Analysts Are Revising Their Forecasts

Chroma ATE Inc. (TWSE:2360) just released its latest full-year report and things are not looking great. Chroma ATE missed earnings this time around, with NT$19b revenue coming in 4.3% below what the analysts had modelled. Statutory earnings per share (EPS) of NT$9.37 also fell short of expectations by 13%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Chroma ATE

Taking into account the latest results, the most recent consensus for Chroma ATE from eight analysts is for revenues of NT$22.3b in 2024. If met, it would imply a decent 19% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 34% to NT$12.63. In the lead-up to this report, the analysts had been modelling revenues of NT$23.1b and earnings per share (EPS) of NT$13.25 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 analysts made no major changes to their price target of NT$308, suggesting the downgrades are not expected to have a long-term impact on Chroma ATE's valuation. 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. Currently, the most bullish analyst values Chroma ATE at NT$340 per share, while the most bearish prices it at NT$285. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 Chroma ATE's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.2% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Chroma ATE to grow faster than 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 downgraded Chroma ATE's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at NT$308, with the latest estimates not enough to have an impact on their price targets.

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.

Plus, you should also learn about the 1 warning sign we've spotted with Chroma ATE .

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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.