Earnings Release: Here's Why Analysts Cut Their indie Semiconductor, Inc. (NASDAQ:INDI) Price Target To US$5.29

Shareholders will be ecstatic, with their stake up 29% over the past week following indie Semiconductor, Inc.'s (NASDAQ:INDI) latest first-quarter results. indie Semiconductor reported revenues of US$54m, in line with expectations, but it unfortunately also reported (statutory) losses of US$0.18 per share, which were slightly larger than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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, the current consensus from indie Semiconductor's seven analysts is for revenues of US$228.3m in 2025. This would reflect a reasonable 4.5% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 22% to US$0.55. Before this latest report, the consensus had been expecting revenues of US$260.0m and US$0.57 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

View our latest analysis for indie Semiconductor

The analysts have cut their price target 21% to US$5.29per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. 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 indie Semiconductor, with the most bullish analyst valuing it at US$6.00 and the most bearish at US$4.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that indie Semiconductor's revenue growth is expected to slow, with the forecast 6.1% annualised growth rate until the end of 2025 being well below the historical 37% p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 16% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than indie Semiconductor.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings per share are more important to value creation for shareholders. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for indie Semiconductor going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - indie Semiconductor has 2 warning signs we think you should be aware of.

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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.