There's been a major selloff in ASMPT Limited (HKG:522) shares in the week since it released its second-quarter report, with the stock down 33% to HK$78.70. It looks like a pretty bad result, all things considered. Although revenues of HK$3.3b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 39% to hit HK$0.33 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the consensus forecast from ASMPT's 20 analysts is for revenues of HK$13.7b in 2024. This reflects an okay 2.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 195% to HK$2.89. Yet prior to the latest earnings, the analysts had been anticipated revenues of HK$15.2b and earnings per share (EPS) of HK$3.15 in 2024. It looks like sentiment has fallen somewhat in the aftermath of these results, with a substantial drop in revenue estimates and a minor downgrade to earnings per share numbers as well.

The consensus price target fell 6.9% to HK$113, with the weaker earnings outlook clearly leading valuation estimates. 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. The most optimistic ASMPT analyst has a price target of HK$150 per share, while the most pessimistic values it at HK$80.00. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that ASMPT's rate of growth is expected to accelerate meaningfully, with the forecast 4.4% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 13% annually. So it's clear that despite the acceleration in growth, ASMPT is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for ASMPT. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of ASMPT's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for ASMPT going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with ASMPT .

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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.

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