Earnings Update: Himax Technologies, Inc. Just Reported And Analysts Are Boosting Their Estimates
It's been a good week for Himax Technologies, Inc. (NASDAQ:HIMX) shareholders, because the company has just released its latest yearly results, and the shares gained 9.8% to US$4.84. The results overall were pretty much dead in line with analyst forecasts; revenues were US$672m and statutory losses were US$0.079 per share. Earnings are an important time for investors, as they can track a company's performance, look at what top 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 analysts are expecting for next year.
See our latest analysis for Himax Technologies
Taking into account the latest results, the most recent consensus for Himax Technologies from five analysts is for revenues of US$827.8m in 2020, which is a sizeable 23% increase on its sales over the past 12 months. Himax Technologies is also expected to turn profitable, with statutory earnings of US$0.12 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$714.6m and losses of US$0.017 per share in 2020. So we can see that the latest results have sparked a pretty clear upgrade to expectations, with higher revenues expected to lead to profit sooner than previously forecast.
With these upgrades, we're not surprised to see that analysts have lifted their price target 63% to US$5.45 per share. 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. The most optimistic Himax Technologies analyst has a price target of US$7.00 per share, while the most pessimistic values it at US$4.30. 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.
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. For example, we noticed that Himax Technologies's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow at 23%, well above its historical decline of 2.8% a year over the past five years. Compare this against analyst estimates for the wider market, which suggest that (in aggregate) market revenues are expected to grow 8.8% next year. Although Himax Technologies's revenues are expected to improve, it seems that analysts are also expecting it to grow faster than the wider market.
The Bottom Line
The most important thing to take away from these updates is that there's been a clear step-change in belief around the business' prospects, with analysts now expecting Himax Technologies to become profitable next year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
Still, 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 Himax Technologies going out to 2021, and you can see them free on our platform here..
You can also view our analysis of Himax Technologies's balance sheet, and whether we think Himax Technologies is carrying too much debt, for free on our platform here.
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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