Analysts Are Updating Their Asia Vital Components Co., Ltd. (TWSE:3017) Estimates After Its First-Quarter Results

Investors in Asia Vital Components Co., Ltd. (TWSE:3017) had a good week, as its shares rose 9.3% to close at NT$585 following the release of its quarterly results. It was a credible result overall, with revenues of NT$15b and statutory earnings per share of NT$4.08 both in line with analyst estimates, showing that Asia Vital Components 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 Asia Vital Components

Taking into account the latest results, the most recent consensus for Asia Vital Components from ten analysts is for revenues of NT$72.0b in 2024. If met, it would imply a solid 12% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 22% to NT$21.02. Yet prior to the latest earnings, the analysts had been anticipated revenues of NT$72.1b and earnings per share (EPS) of NT$20.07 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at NT$863, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Asia Vital Components, with the most bullish analyst valuing it at NT$1,000 and the most bearish at NT$700 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 Asia Vital Components' rate of growth is expected to accelerate meaningfully, with the forecast 16% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 13% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 20% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Asia Vital Components is expected to grow slower 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 Asia Vital Components following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at NT$863, with the latest estimates not enough to have an impact on their price targets.

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

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Asia Vital Components , and understanding this should be part of your investment process.

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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.