Shareholders of Lattice Semiconductor Corporation (NASDAQ:LSCC) will be pleased this week, given that the stock price is up 19% to US$76.26 following its latest annual results. Revenues were US$737m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$1.85, an impressive 26% ahead of estimates. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus, from the twelve analysts covering Lattice Semiconductor, is for revenues of US$615.8m in 2024. This implies a chunky 16% reduction in Lattice Semiconductor's revenue over the past 12 months. Statutory earnings per share are expected to plunge 49% to US$0.95 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$738.9m and earnings per share (EPS) of US$1.38 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a pretty serious reduction to earnings per share numbers as well.
Despite the cuts to forecast earnings, there was no real change to the US$75.85 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. There are some variant perceptions on Lattice Semiconductor, with the most bullish analyst valuing it at US$85.00 and the most bearish at US$60.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Lattice Semiconductor's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 16% by the end of 2024. This indicates a significant reduction from annual growth of 15% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Lattice Semiconductor is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Lattice Semiconductor. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$75.85, with the latest estimates not enough to have an impact on their price targets.
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 Lattice Semiconductor going out to 2026, and you can see them free on our platform here..
Even so, be aware that Lattice Semiconductor is showing 1 warning sign in our investment analysis , you should know about...
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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.