Need To Know: The Consensus Just Cut Its Cohu, Inc. (NASDAQ:COHU) Estimates For 2024

The analysts covering Cohu, Inc. (NASDAQ:COHU) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, the seven analysts covering Cohu provided consensus estimates of US$638m revenue in 2024, which would reflect a small 7.6% decline on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$724m in 2024. The consensus view seems to have become more pessimistic on Cohu, noting the substantial drop in revenue estimates in this update.

Check out our latest analysis for Cohu

Notably, the analysts have cut their price target 11% to US$38.43, suggesting concerns around Cohu's valuation.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 6.1% by the end of 2024. This indicates a significant reduction from annual growth of 12% 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 16% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Cohu is expected to lag the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Cohu next year. They also expect company revenue to perform worse than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Cohu going forwards.

That said, the analysts might have good reason to be negative on Cohu, given its declining profit margins. Learn more, and discover the 1 other concern we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.