The Hikari Tsushin, Inc. (TSE:9435) Half-Yearly Results Are Out And Analysts Have Published New Forecasts

It's been a pretty great week for Hikari Tsushin, Inc. (TSE:9435) shareholders, with its shares surging 11% to JP¥44,210 in the week since its latest interim results. It was a credible result overall, with revenues of JP¥195b and statutory earnings per share of JP¥2,671 both in line with analyst estimates, showing that Hikari Tsushin is executing in line with expectations. 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. 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, Hikari Tsushin's five analysts are now forecasting revenues of JP¥770.1b in 2026. This would be a satisfactory 6.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to fall 16% to JP¥2,683 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥774.9b and earnings per share (EPS) of JP¥2,444 in 2026. So the consensus seems to have become somewhat more optimistic on Hikari Tsushin's earnings potential following these results.

Check out our latest analysis for Hikari Tsushin

There's been no major changes to the consensus price target of JP¥44,185, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Hikari Tsushin, with the most bullish analyst valuing it at JP¥46,000 and the most bearish at JP¥43,000 per share. This is a very narrow spread of estimates, implying either that Hikari Tsushin is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Hikari Tsushin's growth to accelerate, with the forecast 14% annualised growth to the end of 2026 ranking favourably alongside historical growth of 5.0% per annum 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 6.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Hikari Tsushin to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Hikari Tsushin's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still 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 estimates - from multiple Hikari Tsushin analysts - going out to 2028, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Hikari Tsushin that you need to take into consideration.

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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.