One of the biggest stories of last week was how Vicor Corporation (NASDAQ:VICR) shares plunged 26% in the week since its latest third-quarter results, closing yesterday at US$39.94. It looks like a credible result overall - although revenues of US$108m were in line with what the analysts predicted, Vicor surprised by delivering a statutory profit of US$0.37 per share, a notable 17% above expectations. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Vicor
Taking into account the latest results, the most recent consensus for Vicor from three analysts is for revenues of US$439.6m in 2024. If met, it would imply a satisfactory 5.2% increase on its revenue over the past 12 months. Statutory per share are forecast to be US$1.19, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$489.7m and earnings per share (EPS) of US$1.45 in 2024. Indeed, we can see that the analysts are a lot more bearish about Vicor's prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.
The consensus price target fell 8.4% to US$69.33, with the weaker earnings outlook clearly leading valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Vicor analyst has a price target of US$75.00 per share, while the most pessimistic values it at US$65.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Vicor's past performance and to peers in the same industry. We would highlight that Vicor's revenue growth is expected to slow, with the forecast 4.1% annualised growth rate until the end of 2024 being well below the historical 10.0% 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 6.8% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Vicor.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Vicor going out to 2025, and you can see them free on our platform here..
You still need to take note of risks, for example - Vicor has 1 warning sign we think you should be aware of.
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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.