Entegris, Inc. (NASDAQ:ENTG) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat expectations with revenues of US$481m arriving 4.2% ahead of forecasts. Statutory earnings per share (EPS) were US$0.58, 8.1% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Entegris' eight analysts is for revenues of US$1.98b in 2021, which would reflect a notable 12% increase on its sales over the past 12 months. Statutory earnings per share are predicted to leap 23% to US$2.42. Before this earnings report, the analysts had been forecasting revenues of US$1.92b and earnings per share (EPS) of US$2.32 in 2021. 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.
It will come as no surprise to learn that the analysts have increased their price target for Entegris 5.7% to US$82.11on the back of these upgrades. 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. There are some variant perceptions on Entegris, with the most bullish analyst valuing it at US$94.00 and the most bearish at US$66.00 per share. This shows there is still a bit of 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Entegris'historical trends, as next year's 12% revenue growth is roughly in line with 10% annual revenue growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 9.8% per year. So although Entegris is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Entegris' earnings potential next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Entegris will grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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 forecasts for Entegris going out to 2022, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Entegris that you need to be mindful of.
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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