Cohu, Inc. (NASDAQ:COHU) Analysts Are Reducing Their Forecasts For Next Year
Market forces rained on the parade of Cohu, Inc. (NASDAQ:COHU) shareholders today, when the analysts downgraded their forecasts for next year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, the seven analysts covering Cohu provided consensus estimates of US$647m revenue in 2024, which would reflect a small 6.3% decline on its sales over the past 12 months. Statutory earnings per share are supposed to tumble 44% to US$0.61 in the same period. Previously, the analysts had been modelling revenues of US$724m and earnings per share (EPS) of US$1.03 in 2024. Indeed, we can see that the analysts are a lot more bearish about Cohu's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
See our latest analysis for Cohu
It'll come as no surprise then, to learn that the analysts have cut their price target 9.6% to US$39.14.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 5.1% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 12% 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 15% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Cohu is expected to lag the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Cohu. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Cohu's revenues are expected to grow slower than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Cohu.
There might be good reason for analyst bearishness towards Cohu, like its declining profit margins. Learn more, and discover the 1 other risk we've identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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.
