Today is shaping up negative for Giantec Semiconductor Corporation (SHSE:688123) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the downgrade, the latest consensus from Giantec Semiconductor's three analysts is for revenues of CN¥1.1b in 2023, which would reflect a sizeable 24% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 35% to CN¥2.29. Before this latest update, the analysts had been forecasting revenues of CN¥1.2b and earnings per share (EPS) of CN¥3.35 in 2023. Indeed, we can see that the analysts are a lot more bearish about Giantec Semiconductor's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
Check out our latest analysis for Giantec Semiconductor
The consensus price target fell 36% to CN¥71.20, with the weaker earnings outlook clearly leading analyst valuation estimates.
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. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 24% growth on an annualised basis. That is in line with its 26% annual growth over the past three years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 24% per year. So although Giantec Semiconductor is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Giantec Semiconductor.
There might be good reason for analyst bearishness towards Giantec Semiconductor, like concerns around earnings quality. For more information, you can click here to discover this and the 2 other risks we've identified.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.