Earnings Update: Harmonic Drive Systems Inc. (TSE:6324) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts

Explore Harmonic Drive Systems's Fair Values from the Community and select yours

There's been a notable change in appetite for Harmonic Drive Systems Inc. (TSE:6324) shares in the week since its quarterly report, with the stock down 13% to JP¥2,530. It was a credible result overall, with revenues of JP¥13b and statutory earnings per share of JP¥36.57 both in line with analyst estimates, showing that Harmonic Drive Systems is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Following the latest results, Harmonic Drive Systems' eight analysts are now forecasting revenues of JP¥59.7b in 2026. This would be a reasonable 6.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to crater 53% to JP¥18.57 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥61.6b and earnings per share (EPS) of JP¥25.96 in 2026. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

Check out our latest analysis for Harmonic Drive Systems

Despite the cuts to forecast earnings, there was no real change to the JP¥3,784 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Harmonic Drive Systems at JP¥5,000 per share, while the most bearish prices it at JP¥2,900. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2026 brings more of the same, according to the analysts, with revenue forecast to display 8.5% growth on an annualised basis. That is in line with its 8.8% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.7% annually. So it's pretty clear that Harmonic Drive Systems is forecast to grow substantially faster than its industry.

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. They also downgraded Harmonic Drive Systems' revenue estimates, but industry data suggests that it 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 Harmonic Drive Systems going out to 2028, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Harmonic Drive Systems (1 is a bit unpleasant!) that you need to be mindful of.

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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.