Analysts Have Been Trimming Their Vicor Corporation (NASDAQ:VICR) Price Target After Its Latest Report

Vicor Corporation (NASDAQ:VICR) shareholders are probably feeling a little disappointed, since its shares fell 3.3% to US$33.48 in the week after its latest first-quarter results. Vicor reported in line with analyst predictions, delivering revenues of US$84m and statutory earnings per share of US$0.06, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Vicor

Following the recent earnings report, the consensus from three analysts covering Vicor is for revenues of US$330.9m in 2024. This implies a not inconsiderable 15% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to tumble 61% to US$0.39 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$352.8m and earnings per share (EPS) of US$0.32 in 2024. Although the analysts have lowered their revenue forecasts, they've also made a considerable lift to their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

The consensus price target fell 6.1% to US$38.50, with the analysts signalling that the weaker revenue outlook was a more powerful indicator than the upgraded EPS 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. There are some variant perceptions on Vicor, with the most bullish analyst valuing it at US$42.00 and the most bearish at US$35.00 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 20% by the end of 2024. This indicates a significant reduction from annual growth of 10% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Vicor is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Vicor following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. With that said, earnings are more important to the long-term value of the business. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Vicor. 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 Vicor going out to 2025, and you can see them free on our platform here..

You can also see our analysis of Vicor's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.