Revenue Beat: TOCALO Co.,Ltd. Exceeded Revenue Forecasts By 9.8% And Analysts Are Updating Their Estimates

Last week saw the newest quarterly earnings release from TOCALO Co.,Ltd. (TSE:3433), an important milestone in the company's journey to build a stronger business. It was a workmanlike result, with revenues of JP¥15b coming in 9.8% ahead of expectations, and statutory earnings per share of JP¥135, in line with analyst appraisals. 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.

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Following last week's earnings report, TOCALOLtd's three analysts are forecasting 2026 revenues to be JP¥57.4b, approximately in line with the last 12 months. Statutory earnings per share are forecast to shrink 2.0% to JP¥144 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥57.4b and earnings per share (EPS) of JP¥134 in 2026. So the consensus seems to have become somewhat more optimistic on TOCALOLtd's earnings potential following these results.

See our latest analysis for TOCALOLtd

There's been no major changes to the consensus price target of JP¥2,893, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 TOCALOLtd, with the most bullish analyst valuing it at JP¥3,100 and the most bearish at JP¥2,700 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting TOCALOLtd is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that TOCALOLtd's revenue growth is expected to slow, with the forecast 2.2% annualised growth rate until the end of 2026 being well below the historical 7.1% 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 4.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that TOCALOLtd is also expected to grow slower than other industry participants.

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 TOCALOLtd 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 held steady at JP¥2,893, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on TOCALOLtd. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for TOCALOLtd going out to 2028, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for TOCALOLtd you should know about.

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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.