indie Semiconductor, Inc. (NASDAQ:INDI) Just Reported, And Analysts Assigned A US$4.32 Price Target
The investors in indie Semiconductor, Inc.'s (NASDAQ:INDI) will be rubbing their hands together with glee today, after the share price leapt 52% to US$2.28 in the week following its third-quarter results. Revenues were in line with expectations, at US$70m, while statutory losses ballooned to US$0.18 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the eight analysts covering indie Semiconductor are now predicting revenues of US$351.6m in 2027. If met, this would reflect a major 42% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 23% to US$0.50. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$354.7m and losses of US$0.41 per share in 2027. So it's pretty clear the analysts have mixed opinions on indie Semiconductor even after this update; although they reconfirmed their revenue numbers, it came at the cost of a very substantial increase in per-share losses.
View our latest analysis for indie Semiconductor
The consensus price target fell 13% to US$4.32per share, with the analysts clearly concerned by ballooning losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on indie Semiconductor, with the most bullish analyst valuing it at US$6.00 and the most bearish at US$1.55 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting indie Semiconductor's growth to accelerate, with the forecast 32% annualised growth to the end of 2027 ranking favourably alongside historical growth of 24% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 26% annually. indie Semiconductor is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for indie Semiconductor going out to 2028, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with indie Semiconductor (at least 1 which is potentially serious) , and understanding these should be part of your investment process.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.