Harmonic Drive Systems Inc. Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts

There's been a major selloff in Harmonic Drive Systems Inc. (TSE:6324) shares in the week since it released its half-yearly report, with the stock down 22% to JP¥2,133. The results don't look great, especially considering that the analysts had been forecasting a profit and Harmonic Drive Systems delivered a statutory loss of JP¥5.97 per share. Revenues of JP¥14b did beat expectations by 4.3% though. 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.

See our latest analysis for Harmonic Drive Systems

Taking into account the latest results, the consensus forecast from Harmonic Drive Systems' ten analysts is for revenues of JP¥56.0b in 2025. This reflects a credible 4.6% improvement in revenue compared to the last 12 months. Statutory losses are forecast to balloon 98% to JP¥5.58 per share. Before this earnings report, the analysts had been forecasting revenues of JP¥58.3b and earnings per share (EPS) of JP¥24.91 in 2025. There looks to have been a significant drop in sentiment regarding Harmonic Drive Systems' prospects after these latest results, with a minor downgrade to revenues and the analysts now forecasting a loss instead of a profit.

The consensus price target fell 8.6% to JP¥4,229, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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. The most optimistic Harmonic Drive Systems analyst has a price target of JP¥5,800 per share, while the most pessimistic values it at JP¥2,500. 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. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 9.4% growth on an annualised basis. That is in line with its 10% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.8% annually. So although Harmonic Drive Systems is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts are expecting Harmonic Drive Systems to become unprofitable next year. They also downgraded Harmonic Drive Systems' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Harmonic Drive Systems going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Harmonic Drive Systems that we have uncovered.

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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.