It's shaping up to be a tough period for StarPower Semiconductor Ltd. (SHSE:603290), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. Unfortunately, StarPower Semiconductor delivered a serious earnings miss. Revenues of CN¥805m were 19% below expectations, and statutory earnings per share of CN¥0.95 missed estimates by 34%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from StarPower Semiconductor's 17 analysts is for revenues of CN¥4.66b in 2024. This would reflect a sizeable 26% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 22% to CN¥6.21. In the lead-up to this report, the analysts had been modelling revenues of CN¥4.72b and earnings per share (EPS) of CN¥6.47 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥202, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on StarPower Semiconductor, with the most bullish analyst valuing it at CN¥261 and the most bearish at CN¥150 per share. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of StarPower Semiconductor'shistorical trends, as the 37% annualised revenue growth to the end of 2024 is roughly in line with the 37% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 23% annually. So it's pretty clear that StarPower Semiconductor is forecast to grow substantially faster than its industry.
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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for StarPower Semiconductor going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 2 warning signs for StarPower Semiconductor (1 makes us a bit uncomfortable!) that 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.