WT Microelectronics Co., Ltd. (TWSE:3036) Exceeded Expectations And The Analyst Consensus Has Been Reviewing Its Models

WT Microelectronics Co., Ltd. (TWSE:3036) just released its first-quarter report and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 7.7% to hit NT$193b. Statutory earnings per share (EPS) came in at NT$1.57, some 8.8% above whatthe analysts had expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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 WT Microelectronics

Taking into account the latest results, the consensus forecast from WT Microelectronics' three analysts is for revenues of NT$949.7b in 2024. This reflects a major 42% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 41% to NT$7.33. Before this earnings report, the analysts had been forecasting revenues of NT$819.5b and earnings per share (EPS) of NT$10.51 in 2024. Although revenues are expected to increase meaningfully, the analysts have acknowledged the cost of growth, given the large cut to EPS estimates following the latest report.

The consensus price target fell 11% to NT$170, suggesting that the analysts are primarily focused on earnings as the driver of value for this business. 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 WT Microelectronics, with the most bullish analyst valuing it at NT$180 and the most bearish at NT$160 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting WT Microelectronics' growth to accelerate, with the forecast 60% annualised growth to the end of 2024 ranking favourably alongside historical growth of 16% per annum 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 12% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that WT Microelectronics is expected to grow much faster than its industry.

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. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 WT Microelectronics going out to 2025, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 3 warning signs for WT Microelectronics you should be aware of, and 1 of them shouldn't be ignored.

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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.