Investors in MKS Instruments, Inc. (NASDAQ:MKSI) had a good week, as its shares rose 7.5% to close at US$80.05 following the release of its first-quarter results. Revenues were US$936m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.77 were also better than expected, beating analyst predictions by 15%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Taking into account the latest results, the most recent consensus for MKS Instruments from 13 analysts is for revenues of US$3.77b in 2025. If met, it would imply a credible 3.1% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 3.5% to US$3.50. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.79b and earnings per share (EPS) of US$4.13 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target fell 6.1% to US$114, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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 MKS Instruments, with the most bullish analyst valuing it at US$160 and the most bearish at US$85.00 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.

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. We would highlight that MKS Instruments' revenue growth is expected to slow, with the forecast 4.1% annualised growth rate until the end of 2025 being well below the historical 12% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 16% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than MKS Instruments.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of MKS Instruments' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple MKS Instruments analysts - going out to 2027, 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 4 warning signs with MKS Instruments (at least 1 which doesn't sit too well with us) , and understanding these should be part of your investment process.

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.