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

It's been a mediocre week for Entegris, Inc. (NASDAQ:ENTG) shareholders, with the stock dropping 19% to US$102 in the week since its latest quarterly results. Revenues were US$813m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.45, an impressive 34% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Entegris

Following last week's earnings report, Entegris' twelve analysts are forecasting 2024 revenues to be US$3.30b, approximately in line with the last 12 months. Per-share earnings are expected to soar 58% to US$1.93. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.36b and earnings per share (EPS) of US$1.87 in 2024. So the consensus seems to have become somewhat more optimistic on Entegris' earnings potential following these results.

There's been no major changes to the consensus price target of US$146, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. The most optimistic Entegris analyst has a price target of US$164 per share, while the most pessimistic values it at US$119. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. We would highlight that Entegris' revenue growth is expected to slow, with the forecast 1.2% annualised growth rate until the end of 2024 being well below the historical 20% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% per year. Factoring in the forecast slowdown in growth, it seems obvious that Entegris is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Entegris' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Entegris. Long-term earnings power is much more important than next year's profits. We have forecasts for Entegris going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Entegris (1 is a bit unpleasant!) that you need to take into consideration.

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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.

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