On Thursday, BofA Securities revised its stance on Parade Technologies Ltd. (4966:TT) stock, moving from a Buy to a Neutral rating, while also reducing the price target to NT$780.00 from the previous NT$950.00. The adjustment comes as the analyst foresees a deceleration in the company's growth, projecting approximately 13% revenue compound annual growth rate (CAGR) into the years 2025 and 2026, following a stronger year-over-year revenue momentum of around 17% in 2024.
The analyst's commentary indicates a shift in expectations due to a softer growth outlook beyond the second quarter of 2024. The new price objective is now based on a 20 times multiple of the estimated 2025 earnings per share (EPS), a decrease from the previously applied 22 times multiple of the second and third quarter 2024 estimates. This change reflects a more conservative view of Parade Technologies' financial performance in the near to medium term.
Following the earnings call for the second quarter of 2024, BofA Securities has also revised its EPS estimates for Parade Technologies downward for the years 2024 to 2026 by 9-19%. This revision is in response to the company's latest financial outlook and takes into account the anticipated softer revenue trends post the earnings announcement.
The company's third quarter 2024 earnings were reported to be consistent with expectations. However, the guidance provided for fourth quarter 2024 revenue fell short, approximately 8 percentage points behind the estimates previously set by BofA Securities and the consensus. This shortfall has contributed to the more cautious perspective on the stock's future performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.