Results: Meidensha Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

Investors in Meidensha Corporation (TSE:6508) had a good week, as its shares rose 4.8% to close at JP¥4,070 following the release of its half-year results. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at JP¥120b, statutory earnings beat expectations by a notable 49%, coming in at JP¥23.73 per share. 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.

View our latest analysis for Meidensha

Taking into account the latest results, the consensus forecast from Meidensha's five analysts is for revenues of JP¥305.3b in 2025. This reflects a reasonable 5.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to dive 26% to JP¥244 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥304.9b and earnings per share (EPS) of JP¥250 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at JP¥4,100, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Meidensha analyst has a price target of JP¥4,700 per share, while the most pessimistic values it at JP¥3,500. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Meidensha's rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Meidensha is expected to grow much 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. 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.

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

You still need to take note of risks, for example - Meidensha has 3 warning signs we think you should be aware 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.