Micro-Star International Co., Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

As you might know, Micro-Star International Co., Ltd. (TWSE:2377) last week released its latest quarterly, and things did not turn out so great for shareholders. Results look to have been somewhat negative - revenue fell 2.8% short of analyst estimates at NT$47b, and statutory earnings of NT$2.49 per share missed forecasts by 6.1%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Micro-Star International

Following the latest results, Micro-Star International's six analysts are now forecasting revenues of NT$198.1b in 2024. This would be a modest 3.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 36% to NT$12.42. In the lead-up to this report, the analysts had been modelling revenues of NT$204.6b and earnings per share (EPS) of NT$12.97 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$182, suggesting the downgrades are not expected to have a long-term impact on Micro-Star International'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 Micro-Star International at NT$215 per share, while the most bearish prices it at NT$143. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Micro-Star International's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Micro-Star International's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.0% growth on an annualised basis. This is compared to a historical growth rate of 9.3% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 20% per year. Factoring in the forecast slowdown in growth, it seems obvious that Micro-Star International is also expected to grow slower than other industry participants.

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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at NT$182, 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. At Simply Wall St, we have a full range of analyst estimates for Micro-Star International going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Micro-Star International has 2 warning signs (and 1 which is a bit concerning) we think you should know about.

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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.