METAWATER Co., Ltd. Just Recorded A 5.9% Revenue Beat: Here's What Analysts Think

As you might know, METAWATER Co., Ltd. (TSE:9551) just kicked off its latest annual results with some very strong numbers. Results were good overall, with revenues beating analyst predictions by 5.9% to hit JP¥166b. Statutory earnings per share (EPS) came in at JP¥158, some 4.2% above whatthe analysts had expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on METAWATER after the latest results.

See our latest analysis for METAWATER

Following last week's earnings report, METAWATER's four analysts are forecasting 2025 revenues to be JP¥168.6b, approximately in line with the last 12 months. Statutory per share are forecast to be JP¥153, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥160.5b and earnings per share (EPS) of JP¥162 in 2025. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a to revenue, the consensus also made a minor downgrade to its earnings per share forecasts.

Curiously, the consensus price target rose 5.7% to JP¥2,393. We can only conclude that the forecast revenue growth is expected to offset the impact of the expected fall in earnings. 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 METAWATER at JP¥2,700 per share, while the most bearish prices it at JP¥2,000. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that METAWATER's revenue growth is expected to slow, with the forecast 1.8% annualised growth rate until the end of 2025 being well below the historical 6.3% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.8% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than METAWATER.

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 upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for METAWATER going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for METAWATER you should be aware of, and 1 of them shouldn't be ignored.

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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.