Earnings Beat: SWCC Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

A week ago, SWCC Corporation (TSE:5805) came out with a strong set of half-year numbers that could potentially lead to a re-rate of the stock. SWCC beat earnings, with revenues hitting JP¥129b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 13%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Taking into account the latest results, the current consensus from SWCC's five analysts is for revenues of JP¥266.0b in 2026. This would reflect a credible 6.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 9.9% to JP¥562. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥262.2b and earnings per share (EPS) of JP¥540 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

See our latest analysis for SWCC

The consensus price target was unchanged at JP¥9,525, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. Currently, the most bullish analyst values SWCC at JP¥10,700 per share, while the most bearish prices it at JP¥8,600. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that SWCC's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 8.2% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that SWCC is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around SWCC's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 SWCC going out to 2028, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for SWCC (1 is potentially serious) you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.