The analysts might have been a bit too bullish on Ingenic Semiconductor Co.,Ltd. (SZSE:300223), given that the company fell short of expectations when it released its second-quarter results last week. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥1.1b missed by 11%, and statutory earnings per share of CN¥0.23 fell short of forecasts by 35%. 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 Ingenic SemiconductorLtd after the latest results.

Taking into account the latest results, the consensus forecast from Ingenic SemiconductorLtd's four analysts is for revenues of CN¥4.52b in 2024. This reflects a satisfactory 2.3% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be CN¥1.06, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of CN¥5.11b and earnings per share (EPS) of CN¥1.35 in 2024. Indeed, we can see that the analysts are a lot more bearish about Ingenic SemiconductorLtd's prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.

The analysts made no major changes to their price target of CN¥59.57, suggesting the downgrades are not expected to have a long-term impact on Ingenic SemiconductorLtd's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Ingenic SemiconductorLtd analyst has a price target of CN¥79.00 per share, while the most pessimistic values it at CN¥37.70. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Ingenic SemiconductorLtd's revenue growth is expected to slow, with the forecast 4.6% annualised growth rate until the end of 2024 being well below the historical 31% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 22% annually. Factoring in the forecast slowdown in growth, it seems obvious that Ingenic SemiconductorLtd is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ingenic SemiconductorLtd. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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

We also provide an overview of the Ingenic SemiconductorLtd Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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