Lattice Semiconductor Corporation (NASDAQ:LSCC) Analysts Just Cut Their EPS Forecasts Substantially
The analysts covering Lattice Semiconductor Corporation (NASDAQ:LSCC) 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 the analysts seeing grey clouds on the horizon. Shares are up 5.0% to US$73.24 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.
Following the latest downgrade, the current consensus, from the twelve analysts covering Lattice Semiconductor, is for revenues of US$616m in 2024, which would reflect a definite 16% reduction in Lattice Semiconductor's sales over the past 12 months. Statutory earnings per share are anticipated to plummet 49% to US$0.95 in the same period. Previously, the analysts had been modelling revenues of US$739m and earnings per share (EPS) of US$1.38 in 2024. Indeed, we can see that the analysts are a lot more bearish about Lattice Semiconductor's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
View our latest analysis for Lattice Semiconductor
Despite the cuts to forecast earnings, there was no real change to the US$75.85 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 16% by the end of 2024. This indicates a significant reduction from annual growth of 15% 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 17% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Lattice Semiconductor 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 Lattice Semiconductor. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Lattice Semiconductor after the downgrade.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Lattice Semiconductor analysts - going out to 2026, 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.
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