Results: Amkor Technology, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

A week ago, Amkor Technology, Inc. (NASDAQ:AMKR) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. Results were good overall, with revenues beating analyst predictions by 3.6% to hit US$1.3b. Statutory earnings per share (EPS) came in at US$0.09, some 5.3% above whatthe analysts had expected. 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.

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Taking into account the latest results, Amkor Technology's nine analysts currently expect revenues in 2025 to be US$6.24b, approximately in line with the last 12 months. Statutory earnings per share are expected to drop 13% to US$1.12 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$6.21b and earnings per share (EPS) of US$1.39 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

View our latest analysis for Amkor Technology

The average price target fell 13% to US$23.85, with reduced earnings forecasts clearly tied to a lower valuation estimate. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Amkor Technology, with the most bullish analyst valuing it at US$34.78 and the most bearish at US$18.00 per share. 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.

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. We would highlight that revenue is expected to reverse, with a forecast 0.8% annualised decline to the end of 2025. That is a notable change from historical growth of 6.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 16% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Amkor Technology is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Amkor Technology. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Amkor Technology's revenue is expected to perform worse 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 Amkor Technology's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Amkor Technology. Long-term earnings power is much more important than next year's profits. We have forecasts for Amkor Technology going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Amkor Technology 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.