DAIHEN Corporation (TSE:6622) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Last week, you might have seen that DAIHEN Corporation (TSE:6622) released its yearly result to the market. The early response was not positive, with shares down 5.9% to JP¥9,050 in the past week. It was a credible result overall, with revenues of JP¥189b and statutory earnings per share of JP¥673 both in line with analyst estimates, showing that DAIHEN 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for DAIHEN

Following the latest results, DAIHEN's five analysts are now forecasting revenues of JP¥207.0b in 2025. This would be a decent 9.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to sink 20% to JP¥540 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥219.8b and earnings per share (EPS) of JP¥575 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the JP¥9,725 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 DAIHEN at JP¥12,000 per share, while the most bearish prices it at JP¥7,000. 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. It's clear from the latest estimates that DAIHEN's rate of growth is expected to accelerate meaningfully, with the forecast 9.8% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 6.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect DAIHEN to grow faster than the wider 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at JP¥9,725, with the latest estimates not enough to have an impact on their price targets.

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

However, before you get too enthused, we've discovered 3 warning signs for DAIHEN (1 is significant!) that 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.