Results: Chroma ATE Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

A week ago, Chroma ATE Inc. (TWSE:2360) came out with a strong set of second-quarter numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 2.9% to hit NT$5.5b. Chroma ATE reported statutory earnings per share (EPS) NT$3.31, which was a notable 16% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Chroma ATE

Taking into account the latest results, the most recent consensus for Chroma ATE from twelve analysts is for revenues of NT$21.6b in 2024. If met, it would imply a modest 5.1% increase on its revenue over the past 12 months. Per-share earnings are expected to step up 15% to NT$12.42. In the lead-up to this report, the analysts had been modelling revenues of NT$21.5b and earnings per share (EPS) of NT$12.47 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 12% to NT$433. It looks as though they previously had some doubts over whether the business would live up to their expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Chroma ATE at NT$500 per share, while the most bearish prices it at NT$322. 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.

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. It's clear from the latest estimates that Chroma ATE's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 14% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Chroma ATE is expected to grow slower than 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Chroma ATE. Long-term earnings power is much more important than next year's profits. We have forecasts for Chroma ATE going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Chroma ATE 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.