It's been a good week for Axcelis Technologies, Inc. (NASDAQ:ACLS) shareholders, because the company has just released its latest third-quarter results, and the shares gained 9.9% to US$24.26. It looks like a credible result overall - although revenues of US$110m were what the analysts expected, Axcelis Technologies surprised by delivering a (statutory) profit of US$0.32 per share, an impressive 33% above what was forecast. 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.
Following the latest results, Axcelis Technologies' six analysts are now forecasting revenues of US$499.7m in 2021. This would be a notable 19% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 46% to US$1.56. Before this earnings report, the analysts had been forecasting revenues of US$499.7m and earnings per share (EPS) of US$1.56 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 7.1% to US$33.00. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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 Axcelis Technologies, with the most bullish analyst valuing it at US$40.00 and the most bearish at US$26.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. It's clear from the latest estimates that Axcelis Technologies' rate of growth is expected to accelerate meaningfully, with the forecast 19% revenue growth noticeably faster than its historical growth of 8.0%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 10.0% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Axcelis Technologies to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Axcelis Technologies going out to 2022, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 2 warning signs for Axcelis Technologies that you need to be mindful of.
This article by Simply Wall St is general in nature. 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.
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