Analysts Have Made A Financial Statement On Valens Semiconductor Ltd.'s (NYSE:VLN) Third-Quarter Report

A week ago, Valens Semiconductor Ltd. (NYSE:VLN) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. Results overall were solid, with revenues arriving 2.2% better than analyst forecasts at US$23m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.05 per share, were 2.2% smaller than the analysts 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out the opportunities and risks within the US Semiconductor industry.

Following the latest results, Valens Semiconductor's five analysts are now forecasting revenues of US$114.6m in 2023. This would be a sizeable 30% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 20% to US$0.23. Before this earnings announcement, the analysts had been modelling revenues of US$116.0m and losses of US$0.23 per share in 2023.

The consensus price target was unchanged at US$10.80, suggesting that the business - losses and all - is executing in line with estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Valens Semiconductor, with the most bullish analyst valuing it at US$20.00 and the most bearish at US$5.00 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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 Valens Semiconductor's rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 18% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Valens Semiconductor 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. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$10.80, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Valens Semiconductor analysts - going out to 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Valens Semiconductor you should know about.

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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.