It's been a sad week for indie Semiconductor, Inc. (NASDAQ:INDI), who've watched their investment drop 16% to US$4.11 in the week since the company reported its quarterly result. Results look to have been somewhat negative - revenue fell 2.6% short of analyst estimates at US$52m, although statutory losses were somewhat better. The per-share loss was US$0.11, 35% smaller than the analysts were expecting prior to the result. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus, from the eight analysts covering indie Semiconductor, is for revenues of US$217.5m in 2024. This implies a measurable 7.6% reduction in indie Semiconductor's revenue over the past 12 months. Losses are forecast to balloon 28% to US$0.58 per share. Before this earnings announcement, the analysts had been modelling revenues of US$259.3m and losses of US$0.03 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
The average price target fell 11% to US$9.04, implicitly signalling that lower earnings per share are a leading indicator for indie Semiconductor's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic indie Semiconductor analyst has a price target of US$12.00 per share, while the most pessimistic values it at US$7.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. We would highlight that revenue is expected to reverse, with a forecast 15% annualised decline to the end of 2024. That is a notable change from historical growth of 61% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 18% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - indie Semiconductor is expected to lag the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at indie Semiconductor. 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. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on indie Semiconductor. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple indie Semiconductor analysts - going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 2 warning signs for indie Semiconductor that we have uncovered.
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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.
