Asia Vital Components Co., Ltd. (TWSE:3017) Just Reported And Analysts Have Been Lifting Their Price Targets

Investors in Asia Vital Components Co., Ltd. (TWSE:3017) had a good week, as its shares rose 4.4% to close at NT$599 following the release of its full-year results. It was a credible result overall, with revenues of NT$59b and statutory earnings per share of NT$14.11 both in line with analyst estimates, showing that Asia Vital Components is executing in line with expectations. 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'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 consensus forecast from Asia Vital Components' seven analysts is for revenues of NT$69.7b in 2024. This reflects a solid 18% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 34% to NT$18.60. In the lead-up to this report, the analysts had been modelling revenues of NT$71.2b and earnings per share (EPS) of NT$18.22 in 2024. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

There's been a 36% lift in the price target to NT$686, with the analysts signalling that the higher earnings forecasts are more relevant to the business than the weaker revenue estimates. 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. The most optimistic Asia Vital Components analyst has a price target of NT$765 per share, while the most pessimistic values it at NT$460. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Asia Vital Components' growth to accelerate, with the forecast 18% annualised growth to the end of 2024 ranking favourably alongside historical growth of 14% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 16% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Asia Vital Components is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Asia Vital Components' earnings potential next year. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Still, earnings per share are more important to value creation for shareholders. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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. At Simply Wall St, we have a full range of analyst estimates for Asia Vital Components going out to 2025, and you can see them free on our platform here..

You still need to take note of risks, for example - Asia Vital Components has 2 warning signs (and 1 which is 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.