Analysts Have Lowered Expectations For Innolux Corporation (TWSE:3481) After Its Latest Results

Last week, you might have seen that Innolux Corporation (TWSE:3481) released its annual result to the market. The early response was not positive, with shares down 7.9% to NT$15.25 in the past week. Revenues came in at NT$212b, in line with forecasts and the company reported a statutory loss of NT$2.01 per share, roughly 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Innolux

Following the latest results, Innolux's six analysts are now forecasting revenues of NT$222.3b in 2024. This would be a reasonable 5.0% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 72% to NT$0.59. Yet prior to the latest earnings, the analysts had been forecasting revenues of NT$234.7b and losses of NT$0.48 per share in 2024. While this year's revenue estimates dropped there was also a sizeable expansion in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

There was no major change to the consensus price target of NT$17.47, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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 Innolux at NT$21.50 per share, while the most bearish prices it at NT$11.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Innolux's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 5.0% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 3.3% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 10% annually for the foreseeable future. So although Innolux's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Innolux. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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. We have estimates - from multiple Innolux analysts - going out to 2025, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Innolux .

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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.