In This Article:
Shareholders will be ecstatic, with their stake up 21% over the past week following IQE plc's (LON:IQE) latest full-year results. Revenues were in line with expectations, at UK£118m, while statutory losses ballooned to UK£0.04 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
We've discovered 2 warning signs about IQE. View them for free.
Following last week's earnings report, IQE's three analysts are forecasting 2025 revenues to be UK£116.7m, approximately in line with the last 12 months. The loss per share is expected to ameliorate slightly, reducing to UK£0.038. Yet prior to the latest earnings, the analysts had been forecasting revenues of UK£118.7m and losses of UK£0.039 per share in 2025. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
View our latest analysis for IQE
The consensus price target fell 55% to UK£0.22despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations. 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. Currently, the most bullish analyst values IQE at UK£0.24 per share, while the most bearish prices it at UK£0.20. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting IQE is an easy business to forecast or the the analysts are all using similar assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2025 compared to the historical decline of 6.4% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 22% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect IQE to suffer worse than the wider industry.