It's been a good week for ArcSoft Corporation Limited (SHSE:688088) shareholders, because the company has just released its latest third-quarter results, and the shares gained 3.3% to CN¥34.83. Revenues were CN¥193m, 19% below analyst expectations, although losses didn't appear to worsen significantly, with a statutory per-share loss of CN¥0.22 being in line with what the analysts anticipated. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on ArcSoft after the latest results.

After the latest results, the six analysts covering ArcSoft are now predicting revenues of CN¥1.12b in 2025. If met, this would reflect a major 52% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 95% to CN¥0.46. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥1.13b and earnings per share (EPS) of CN¥0.45 in 2025. So the consensus seems to have become somewhat more optimistic on ArcSoft's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 8.6% to CN¥40.49. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on ArcSoft, with the most bullish analyst valuing it at CN¥48.50 and the most bearish at CN¥31.80 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting ArcSoft's growth to accelerate, with the forecast 40% annualised growth to the end of 2025 ranking favourably alongside historical growth of 2.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 19% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that ArcSoft is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards ArcSoft following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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

You still need to take note of risks, for example - ArcSoft has 2 warning signs (and 1 which doesn't sit too well with us) we think 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.