The latest analyst coverage could presage a bad day for Ingenic Semiconductor Co.,Ltd. (SZSE:300223), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
After this downgrade, Ingenic SemiconductorLtd's four analysts are now forecasting revenues of CN¥4.8b in 2024. This would be a credible 7.4% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 56% to CN¥1.66. Previously, the analysts had been modelling revenues of CN¥5.4b and earnings per share (EPS) of CN¥1.70 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a small dip in EPS estimates to boot.
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. We would highlight that Ingenic SemiconductorLtd's revenue growth is expected to slow, with the forecast 7.4% annualised growth rate until the end of 2024 being well below the historical 37% 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 23% 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 most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Ingenic SemiconductorLtd going forwards.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Ingenic SemiconductorLtd analysts - going out to 2025, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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