Photronics, Inc. Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

It's been a good week for Photronics, Inc. (NASDAQ:PLAB) shareholders, because the company has just released its latest third-quarter results, and the shares gained 5.4% to US$25.86. Revenues came in 6.2% below expectations, at US$211m. Statutory earnings per share were relatively better off, with a per-share profit of US$0.55 being roughly in line with analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what expert is 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 analyst is expecting for next year.

View our latest analysis for Photronics

Taking into account the latest results, the consensus forecast from Photronics' lone analyst is for revenues of US$940.0m in 2025. This reflects a satisfactory 7.8% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be US$2.20, roughly flat on the last 12 months. In the lead-up to this report, the analyst had been modelling revenues of US$960.0m and earnings per share (EPS) of US$2.40 in 2025. The analyst are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

The average price target climbed 14% to US$32.00despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Photronics' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 6.2% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 18% 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 Photronics.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Photronics. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for Photronics going out as far as 2025, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Photronics .

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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.