Results: SK-Electronics CO.,LTD. Exceeded Expectations And The Consensus Has Updated Its Estimates
Last week, you might have seen that SK-Electronics CO.,LTD. (TSE:6677) released its quarterly result to the market. The early response was not positive, with shares down 8.3% to JP¥3,365 in the past week. The results were mixed; although revenues of JP¥6.9b fell 18% short of analyst estimates, statutory earnings per share (EPS) of JP¥72.97 beat expectations by 17%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on SK-ElectronicsLTD after the latest results.
After the latest results, the two analysts covering SK-ElectronicsLTD are now predicting revenues of JP¥31.8b in 2027. If met, this would reflect a meaningful 12% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be JP¥313, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of JP¥32.5b and earnings per share (EPS) of JP¥327 in 2027. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
Check out our latest analysis for SK-ElectronicsLTD
The average price target climbed 14% to JP¥4,000despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting SK-ElectronicsLTD's growth to accelerate, with the forecast 9.4% annualised growth to the end of 2027 ranking favourably alongside historical growth of 6.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 17% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, SK-ElectronicsLTD is expected to grow slower than 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 SK-ElectronicsLTD. 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. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on SK-ElectronicsLTD. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2028, which can be seen for free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for SK-ElectronicsLTD 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.