Rainbows and Unicorns: Advantest Corporation (TSE:6857) Analysts Just Became A Lot More Optimistic
Advantest Corporation (TSE:6857) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Advantest has also found favour with investors, with the stock up a notable 18% to JP¥32,930 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
Following the upgrade, the latest consensus from Advantest's 22 analysts is for revenues of JP¥1.7t in 2027, which would reflect a huge 41% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 34% to JP¥853. Prior to this update, the analysts had been forecasting revenues of JP¥1.5t and earnings per share (EPS) of JP¥725 in 2027. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
Check out our latest analysis for Advantest
With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.3% to JP¥37,757 per share.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Advantest's rate of growth is expected to accelerate meaningfully, with the forecast 58% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 24% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 17% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Advantest is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Advantest.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Advantest analysts - going out to 2029, and you can see them free on our platform here.
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 backed by insiders.
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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.