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Veeco Instruments Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

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Veeco Instruments Inc. (NASDAQ:VECO) just released its latest quarterly results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 7.8% to hit US$146m. Veeco Instruments also reported a statutory profit of US$0.12, which was an impressive 50% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Veeco Instruments after the latest results.

See our latest analysis for Veeco Instruments

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earnings-and-revenue-growth

After the latest results, the five analysts covering Veeco Instruments are now predicting revenues of US$572.3m in 2021. If met, this would reflect a satisfactory 7.8% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 152% to US$0.48. Before this earnings report, the analysts had been forecasting revenues of US$555.1m and earnings per share (EPS) of US$0.42 in 2021. So it seems there's been a definite increase in optimism about Veeco Instruments' future following the latest results, with a nice increase in the earnings per share forecasts in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$29.17, suggesting that the forecast performance does not have a long term impact on the company's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Veeco Instruments analyst has a price target of US$32.00 per share, while the most pessimistic values it at US$27.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 clear from the latest estimates that Veeco Instruments' rate of growth is expected to accelerate meaningfully, with the forecast 16% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 3.7% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Veeco Instruments is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Veeco Instruments' earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Veeco Instruments going out to 2023, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Veeco Instruments (at least 1 which is concerning) , and understanding these should be part of your investment process.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.