Earnings Update: Recruit Holdings Co., Ltd. (TSE:6098) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts

Investors in Recruit Holdings Co., Ltd. (TSE:6098) had a good week, as its shares rose 5.3% to close at JP¥8,302 following the release of its first-quarter results. It was a workmanlike result, with revenues of JP¥902b coming in 3.7% ahead of expectations, and statutory earnings per share of JP¥226, in line with analyst appraisals. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Recruit Holdings

Following last week's earnings report, Recruit Holdings' 13 analysts are forecasting 2025 revenues to be JP¥3.52t, approximately in line with the last 12 months. Per-share earnings are expected to increase 5.3% to JP¥250. Before this earnings report, the analysts had been forecasting revenues of JP¥3.53t and earnings per share (EPS) of JP¥246 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥9,031. 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 Recruit Holdings, with the most bullish analyst valuing it at JP¥11,000 and the most bearish at JP¥6,900 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 pretty clear that there is an expectation that Recruit Holdings' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.1% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.0% annually. Factoring in the forecast slowdown in growth, it seems obvious that Recruit Holdings is also expected to grow slower than other industry participants.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at JP¥9,031, with the latest estimates not enough to have an impact on their price targets.

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 Recruit Holdings 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.

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

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.