AXT, Inc. (NASDAQ:AXTI) Analysts Are Pretty Bullish On The Stock After Recent Results

AXT, Inc. (NASDAQ:AXTI) just released its latest quarterly results and things are looking bullish. Revenues and losses per share were both better than expected, with revenues of US$28m leading estimates by 6.0%. Statutory losses were smaller than the analystsexpected, coming in at US$0.04 per share. 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.

See our latest analysis for AXT

After the latest results, the four analysts covering AXT are now predicting revenues of US$104.3m in 2024. If met, this would reflect a solid 18% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 38% to US$0.19. Before this earnings announcement, the analysts had been modelling revenues of US$104.2m and losses of US$0.31 per share in 2024. Although the revenue estimates have not really changed AXT'sfuture looks a little different to the past, with a considerable decrease in the loss per share forecasts in particular.

These new estimates led to the consensus price target rising 17% to US$5.50, with lower forecast losses suggesting things could be looking up for AXT. 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 AXT at US$6.00 per share, while the most bearish prices it at US$5.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. It's clear from the latest estimates that AXT's rate of growth is expected to accelerate meaningfully, with the forecast 39% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect AXT to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on AXT. Long-term earnings power is much more important than next year's profits. We have forecasts for AXT going out to 2025, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for AXT you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com