Last week, you might have seen that Diodes Incorporated (NASDAQ:DIOD) released its quarterly result to the market. The early response was not positive, with shares down 3.1% to US$64.68 in the past week. It looks like a pretty bad result, all things considered. Although revenues of US$320m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 45% to hit US$0.17 per share. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the consensus from Diodes' five analysts is for revenues of US$1.32b in 2024, which would reflect a perceptible 2.3% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to plummet 37% to US$1.32 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.32b and earnings per share (EPS) of US$1.62 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.
The consensus price target held steady at US$77.25, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Diodes analyst has a price target of US$85.00 per share, while the most pessimistic values it at US$69.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Diodes is an easy business to forecast or the the analysts are all using similar assumptions.
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 would highlight that revenue is expected to reverse, with a forecast 4.5% annualised decline to the end of 2024. That is a notable change from historical growth of 8.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 18% annually for the foreseeable future. It's pretty clear that Diodes' revenues are expected to perform substantially worse 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 Diodes. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$77.25, with the latest estimates not enough to have an impact on their price targets.
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 Diodes going out to 2025, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Diodes 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.
