Investors in ASMPT Limited (HKG:522) had a good week, as its shares rose 5.0% to close at HK$95.95 following the release of its full-year results. It was not a great result overall. While revenues of HK$15b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 20% to hit HK$1.73 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Taking into account the latest results, the current consensus from ASMPT's 16 analysts is for revenues of HK$16.3b in 2024. This would reflect a solid 11% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 108% to HK$3.59. Before this earnings report, the analysts had been forecasting revenues of HK$17.1b and earnings per share (EPS) of HK$4.16 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The average price target climbed 13% to HK$98.02despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. 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. Currently, the most bullish analyst values ASMPT at HK$130 per share, while the most bearish prices it at HK$62.66. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that ASMPT's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. ASMPT is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for ASMPT. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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

However, before you get too enthused, we've discovered 1 warning sign for ASMPT that you should be aware of.

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