Vicor Corporation Just Reported A Surprise Loss: Here's What Analysts Think Will Happen Next

Investors in Vicor Corporation (NASDAQ:VICR) had a good week, as its shares rose 2.7% to close at US$37.97 following the release of its quarterly results. The results don't look great, especially considering that the analysts had been forecasting a profit and Vicor delivered a statutory loss of US$0.03 per share. Revenues of US$86m did beat expectations by 5.0% though. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Vicor

After the latest results, the consensus from Vicor's three analysts is for revenues of US$340.7m in 2024, which would reflect a measurable 8.0% decline in revenue compared to the last year of performance. Per-share earnings are expected to bounce 81% to US$0.39. In the lead-up to this report, the analysts had been modelling revenues of US$333.9m and earnings per share (EPS) of US$0.32 in 2024. So it seems there's been a definite increase in optimism about Vicor's future following the latest results, with a great increase in the earnings per share forecasts in particular.

Despite these upgrades, the consensus price target fell 11% to US$36.50, perhaps signalling that the uplift in performance is not expected to last. 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. Currently, the most bullish analyst values Vicor at US$38.00 per share, while the most bearish prices it at US$35.00. This is a very narrow spread of estimates, implying either that Vicor is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 15% by the end of 2024. This indicates a significant reduction from annual growth of 9.6% 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 8.0% 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 biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Vicor's earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. 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. We have forecasts for Vicor going out to 2026, and you can see them free on our platform here.

Even so, be aware that Vicor is showing 2 warning signs 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.

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