AXT, Inc. (NASDAQ:AXTI) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates
AXT, Inc. (NASDAQ:AXTI) just released its latest full-year results and things are looking bullish. Results overall were credible, with revenues arriving 3.9% better than analyst forecasts at US$76m. Higher revenues also resulted in lower statutory losses, which were US$0.42 per share, some 3.9% smaller than the analysts expected. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for AXT
Following the latest results, AXT's five analysts are now forecasting revenues of US$92.4m in 2024. This would be a substantial 22% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 76% to US$0.10. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$86.9m and losses of US$0.31 per share in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a considerable decrease in loss per share in particular.
The consensus price target rose 14% to US$4.71, with the analysts encouraged by the higher revenue and lower forecast losses for next year. 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 AXT analyst has a price target of US$6.00 per share, while the most pessimistic values it at US$3.75. 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.
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. It's clear from the latest estimates that AXT's rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 5.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that AXT is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is 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.
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 estimates - from multiple AXT analysts - going out to 2025, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for AXT you should know about.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
