Last week saw the newest quarterly earnings release from SiTime Corporation (NASDAQ:SITM), an important milestone in the company's journey to build a stronger business. The results don't look great, especially considering that statutory losses grew 13% toUS$1.16 per share. Revenues of US$43,866,000 did beat expectations by 7.0%, but it looks like a bit of a cold comfort. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, SiTime's five analysts are now forecasting revenues of US$190.8m in 2024. This would be a huge 23% improvement in revenue compared to the last 12 months. Losses are forecast to narrow 2.7% to US$3.98 per share. Before this latest report, the consensus had been expecting revenues of US$180.8m and US$3.62 per share in losses. While this year's revenue estimates increased, there was also a noticeable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The consensus price target stayed unchanged at US$137, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation. 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. Currently, the most bullish analyst values SiTime at US$175 per share, while the most bearish prices it at US$90.00. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting SiTime's growth to accelerate, with the forecast 52% annualised growth to the end of 2024 ranking favourably alongside historical growth of 16% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect SiTime to grow faster than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at SiTime. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$137, 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 SiTime analysts - going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 4 warning signs for SiTime that we have uncovered.
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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.