Analysts Have Made A Financial Statement On Pegatron Corporation's (TWSE:4938) Third-Quarter Report

Shareholders might have noticed that Pegatron Corporation (TWSE:4938) filed its quarterly result this time last week. The early response was not positive, with shares down 3.1% to NT$96.70 in the past week. Pegatron reported in line with analyst predictions, delivering revenues of NT$294b and statutory earnings per share of NT$1.61, suggesting the business is executing well and in line with its plan. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Pegatron

Taking into account the latest results, the consensus forecast from Pegatron's 13 analysts is for revenues of NT$1.27t in 2025. This reflects a meaningful 11% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be NT$6.91, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of NT$1.28t and earnings per share (EPS) of NT$7.25 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at NT$104, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Pegatron, with the most bullish analyst valuing it at NT$120 and the most bearish at NT$92.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. One thing stands out from these estimates, which is that Pegatron is forecast to grow faster in the future than it has in the past, with revenues expected to display 8.7% annualised growth until the end of 2025. If achieved, this would be a much better result than the 2.9% annual decline 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 21% annually for the foreseeable future. Although Pegatron's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Pegatron. On the plus side, there were no major changes to revenue estimates; although 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Pegatron going out to 2026, and you can see them free on our platform here.

Even so, be aware that Pegatron is showing 1 warning sign in our investment analysis , 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.