The Consensus EPS Estimates For Himax Technologies, Inc. (NASDAQ:HIMX) Just Fell Dramatically
The analysts covering Himax Technologies, Inc. (NASDAQ:HIMX) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
After this downgrade, Himax Technologies' three analysts are now forecasting revenues of US$876m in 2021. This would be a sizeable 26% improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of US$0.21 per share this year. Previously, the analysts had been modelling revenues of US$922m and earnings per share (EPS) of US$0.23 in 2021. Forecasts are clearly less bullish than previously, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.
View our latest analysis for Himax Technologies
The consensus price target fell 8.6% to US$4.67, with the weaker earnings outlook clearly leading analyst valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Himax Technologies, with the most bullish analyst valuing it at US$5.50 and the most bearish at US$3.80 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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. For example, we noticed that Himax Technologies' rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 26%, well above its historical decline of 2.3% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 9.0% per year. Not only are Himax Technologies' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than 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 Himax Technologies. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Himax Technologies going out to 2021, and you can see them 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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