VinFast Auto Ltd. (NASDAQ:VFS) Just Reported Earnings, And Analysts Cut Their Target Price

As you might know, VinFast Auto Ltd. (NASDAQ:VFS) last week released its latest quarterly, and things did not turn out so great for shareholders. Earnings missed the mark, with revenues of ₫7.7t falling badly (29%) short of expectations. Losses were mildly higher, with a ₫6,452 per-share loss being 4.0% above what the analysts modelled. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for VinFast Auto

After the latest results, the four analysts covering VinFast Auto are now predicting revenues of ₫70t in 2024. If met, this would reflect a huge 106% improvement in revenue compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to ₫23,627. Yet prior to the latest earnings, the analysts had been forecasting revenues of ₫67t and losses of ₫22,102 per share in 2024. So it's pretty clear consensus is mixed on VinFast Auto after the new consensus numbers; while the analysts lifted revenue numbers, they also administered a modest increase to per-share loss expectations.

Spiting the revenue upgrading, the average price target fell 19% to US$8.50, clearly signalling that higher forecast losses are a valuation concern. 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. The most optimistic VinFast Auto analyst has a price target of US$13.00 per share, while the most pessimistic values it at US$5.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. We can infer from the latest estimates that forecasts expect a continuation of VinFast Auto'shistorical trends, as the 162% annualised revenue growth to the end of 2024 is roughly in line with the 160% annual growth over the past year. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 11% annually. So although VinFast Auto is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider 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 VinFast Auto. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of VinFast Auto's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on VinFast Auto. 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 VinFast Auto going out to 2026, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 4 warning signs for VinFast Auto (3 don't sit too well with us) 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.