SiTime Corporation (NASDAQ:SITM) Released Earnings Last Week And Analysts Lifted Their Price Target To US$240

Simply Wall St.
08 Feb

There's been a notable change in appetite for SiTime Corporation (NASDAQ:SITM) shares in the week since its yearly report, with the stock down 12% to US$180. Revenues were a bright spot, with US$203m in revenue arriving 2.0% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$4.05, some 5.7% below consensus predictions. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on SiTime after the latest results.

See our latest analysis for SiTime

NasdaqGM:SITM Earnings and Revenue Growth February 8th 2025

Following the latest results, SiTime's six analysts are now forecasting revenues of US$257.2m in 2025. This would be a huge 27% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 38% to US$2.50. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$251.9m and losses of US$2.19 per share in 2025. While this year's revenue estimates increased, there was also a considerable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

It will come as a surprise to learn that the consensus price target rose 11% to US$240, with the analysts clearly more interested in growing revenue, even as losses intensify. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on SiTime, with the most bullish analyst valuing it at US$275 and the most bearish at US$180 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await SiTime shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting SiTime's growth to accelerate, with the forecast 27% annualised growth to the end of 2025 ranking favourably alongside historical growth of 10% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect SiTime to grow faster than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at SiTime. Happily, they also upgraded their revenue estimates, and are forecasting them 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for SiTime going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with SiTime .

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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.

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