Stock Analysis

Earnings Update: Here's Why Analysts Just Lifted Their Quanta Computer Inc. (TWSE:2382) Price Target To NT$304

TWSE:2382
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As you might know, Quanta Computer Inc. (TWSE:2382) recently reported its full-year numbers. The result was positive overall - although revenues of NT$1.1t were in line with what the analysts predicted, Quanta Computer surprised by delivering a statutory profit of NT$10.29 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Quanta Computer

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TWSE:2382 Earnings and Revenue Growth March 20th 2024

Taking into account the latest results, the current consensus from Quanta Computer's 15 analysts is for revenues of NT$1.53t in 2024. This would reflect a huge 41% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 25% to NT$12.85. Before this earnings report, the analysts had been forecasting revenues of NT$1.56t and earnings per share (EPS) of NT$13.16 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 average price target climbed 5.5% to NT$304despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. 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. There are some variant perceptions on Quanta Computer, with the most bullish analyst valuing it at NT$330 and the most bearish at NT$220 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Quanta Computer shareholders.

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 Quanta Computer's growth to accelerate, with the forecast 41% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.6% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Quanta Computer to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Quanta Computer. They also downgraded Quanta Computer's revenue estimates, but industry data suggests that it is expected to grow faster 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Quanta Computer 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 - Quanta Computer has 1 warning sign we think you should be aware of.

Valuation is complex, but we're helping make it simple.

Find out whether Quanta Computer is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.