Earnings Update: Elite Material Co., Ltd. (TWSE:2383) Just Reported And Analysts Are Boosting Their Estimates

It's been a good week for Elite Material Co., Ltd. (TWSE:2383) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.9% to NT$417. It was a credible result overall, with revenues of NT$13b and statutory earnings per share of NT$5.69 both in line with analyst estimates, showing that Elite Material is executing in line with expectations. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Elite Material

Taking into account the latest results, the consensus forecast from Elite Material's 13 analysts is for revenues of NT$57.4b in 2024. This reflects a major 23% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 33% to NT$27.07. Yet prior to the latest earnings, the analysts had been anticipated revenues of NT$53.4b and earnings per share (EPS) of NT$25.34 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Despite these upgrades,the analysts have not made any major changes to their price target of NT$548, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. There are some variant perceptions on Elite Material, with the most bullish analyst valuing it at NT$675 and the most bearish at NT$450 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. It's clear from the latest estimates that Elite Material's rate of growth is expected to accelerate meaningfully, with the forecast 31% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 13% 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 11% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Elite Material to grow faster than the wider industry.

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 Elite Material following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Elite Material going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 4 warning signs for Elite Material (2 can't be ignored!) that you need to take into consideration.

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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.