Genius Electronic Optical Co., Ltd (TWSE:3406) Analysts Are Pretty Bullish On The Stock After Recent Results

It's been a good week for Genius Electronic Optical Co., Ltd (TWSE:3406) shareholders, because the company has just released its latest yearly results, and the shares gained 4.4% to NT$418. Results were roughly in line with estimates, with revenues of NT$22b and statutory earnings per share of NT$27.25. 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 Genius Electronic Optical

After the latest results, the seven analysts covering Genius Electronic Optical are now predicting revenues of NT$23.3b in 2024. If met, this would reflect an okay 7.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 15% to NT$31.44. Yet prior to the latest earnings, the analysts had been anticipated revenues of NT$22.9b and earnings per share (EPS) of NT$27.88 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice increase in earnings per share expectations following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 8.3% to NT$450. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Genius Electronic Optical at NT$500 per share, while the most bearish prices it at NT$315. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Genius Electronic Optical's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.3% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Genius Electronic Optical.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Genius Electronic Optical's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Genius Electronic Optical's revenue is expected to perform worse than the wider industry. 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 Genius Electronic Optical. 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 Genius Electronic Optical going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for Genius Electronic Optical you should be aware of.

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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.