SMS Co., Ltd. Just Beat EPS By 24%: Here's What Analysts Think Will Happen Next

It's been a good week for SMS Co., Ltd. (TSE:2175) shareholders, because the company has just released its latest quarterly results, and the shares gained 6.4% to JP¥2,189. Revenues of JP¥17b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of JP¥36.71 an impressive 24% ahead of estimates. 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.

View our latest analysis for SMS

Taking into account the latest results, the current consensus from SMS' seven analysts is for revenues of JP¥65.2b in 2025. This would reflect a solid 16% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 15% to JP¥93.38. Before this earnings report, the analysts had been forecasting revenues of JP¥65.4b and earnings per share (EPS) of JP¥93.91 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥3,483. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on SMS, with the most bullish analyst valuing it at JP¥5,000 and the most bearish at JP¥2,800 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the 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 analysts are definitely expecting SMS' growth to accelerate, with the forecast 22% annualised growth to the end of 2025 ranking favourably alongside historical growth of 11% 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 6.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that SMS is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at JP¥3,483, 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 SMS analysts - going out to 2027, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com