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Celebrations may be in order for Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The market seems to be pricing in some improvement in the business too, with the stock up 7.5% over the past week, closing at US$38.70. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
After this upgrade, Kulicke and Soffa Industries' four analysts are now forecasting revenues of US$888m in 2021. This would be a substantial 43% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 87% to US$1.55. Previously, the analysts had been modelling revenues of US$778m and earnings per share (EPS) of US$1.22 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 11% to US$42.00 per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Kulicke and Soffa Industries at US$44.00 per share, while the most bearish prices it at US$30.00. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kulicke and Soffa Industries' past performance and to peers in the same industry. The analysts are definitely expecting Kulicke and Soffa Industries' growth to accelerate, with the forecast 43% growth ranking favourably alongside historical growth of 0.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.6% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Kulicke and Soffa Industries is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Kulicke and Soffa Industries.
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 Kulicke and Soffa Industries going out to 2022, 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.
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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