Investors in Ingenic Semiconductor Co.,Ltd. (SZSE:300223) had a good week, as its shares rose 5.7% to close at CN¥70.66 following the release of its third-quarter results. Revenues were CN¥1.2b, 11% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of CN¥0.31 being in line with what the analysts forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Ingenic SemiconductorLtd
Taking into account the latest results, the consensus forecast from Ingenic SemiconductorLtd's seven analysts is for revenues of CN¥6.14b in 2024. This reflects a sizeable 33% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 124% to CN¥1.98. In the lead-up to this report, the analysts had been modelling revenues of CN¥6.27b and earnings per share (EPS) of CN¥2.01 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
It will come as no surprise then, that the consensus price target fell 5.6% to CN¥79.10following these changes. 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 Ingenic SemiconductorLtd, with the most bullish analyst valuing it at CN¥102 and the most bearish at CN¥62.00 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Ingenic SemiconductorLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 26% growth on an annualised basis. This is compared to a historical growth rate of 47% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 25% annually. So it's pretty clear that, while Ingenic SemiconductorLtd's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Still, earnings are more important to the intrinsic value of the business. 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Ingenic SemiconductorLtd going out to 2025, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Ingenic SemiconductorLtd that 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.
