US$112 - That's What Analysts Think MKS Instruments, Inc. (NASDAQ:MKSI) Is Worth After These Results
It's been a good week for MKS Instruments, Inc. (NASDAQ:MKSI) shareholders, because the company has just released its latest yearly results, and the shares gained 5.4% to US$114. The statutory results were mixed overall, with revenues of US$3.6b in line with analyst forecasts, but losses of US$27.54 per share, some 4.1% larger than the analysts were predicting. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for MKS Instruments
Following last week's earnings report, MKS Instruments' seven analysts are forecasting 2024 revenues to be US$3.64b, approximately in line with the last 12 months. MKS Instruments is also expected to turn profitable, with statutory earnings of US$1.14 per share. Before this earnings report, the analysts had been forecasting revenues of US$3.67b and earnings per share (EPS) of US$1.40 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 12% to US$112, suggesting the revised estimates are not indicative of a weaker long-term future for the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic MKS Instruments analyst has a price target of US$130 per share, while the most pessimistic values it at US$86.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. It's pretty clear that there is an expectation that MKS Instruments' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.6% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 16% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than MKS Instruments.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for MKS Instruments going out to 2025, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 2 warning signs for MKS Instruments you should be aware of.
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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.
