As you might know, Advantest Corporation (TSE:6857) just kicked off its latest half-yearly results with some very strong numbers. The company beat forecasts, with revenue of JP¥845b, some 6.2% above estimates, and statutory earnings per share (EPS) coming in at JP¥509, 28% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the 22 analysts covering Advantest are now predicting revenues of JP¥1.87t in 2027. If met, this would reflect a substantial 29% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 28% to JP¥1,017. Before this earnings report, the analysts had been forecasting revenues of JP¥1.76t and earnings per share (EPS) of JP¥932 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
View our latest analysis for Advantest
With these upgrades, we're not surprised to see that the analysts have lifted their price target 7.1% to JP¥45,771per 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. There are some variant perceptions on Advantest, with the most bullish analyst valuing it at JP¥55,000 and the most bearish at JP¥23,000 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Advantest's rate of growth is expected to accelerate meaningfully, with the forecast 66% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 26% 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 19% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Advantest to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Advantest following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Advantest analysts - going out to 2029, and you can see them free on our platform here.
Even so, be aware that Advantest is showing 1 warning sign in our investment analysis , you should know about...
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