It's been a pretty great week for SG Micro Corp (SZSE:300661) shareholders, with its shares surging 10% to CN¥72.75 in the week since its latest quarterly results. It was a pretty mixed result, with revenues beating expectations to hit CN¥847m. Statutory earnings fell 5.0% short of analyst forecasts, reaching CN¥0.26 per share. 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. 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 current consensus from SG Micro's eleven analysts is for revenues of CN¥3.33b in 2024. This would reflect a solid 9.3% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 36% to CN¥1.07. Before this earnings report, the analysts had been forecasting revenues of CN¥3.24b and earnings per share (EPS) of CN¥1.06 in 2024. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small increase to to revenue forecasts.
It may not be a surprise to see thatthe analysts have reconfirmed their price target of CN¥85.82, implying that the uplift in revenue is not expected to greatly contribute to SG Micro's valuation in the near term. 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 SG Micro analyst has a price target of CN¥103 per share, while the most pessimistic values it at CN¥58.46. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the SG Micro's past performance and to peers in the same industry. It's pretty clear that there is an expectation that SG Micro's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 19% growth on an annualised basis. This is compared to a historical growth rate of 28% over the past five years. Compare this to the 215 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 22% per year. So it's pretty clear that, while SG Micro'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. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 SG Micro going out to 2026, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.
