Sega Sammy Holdings Inc. Just Missed EPS By 46%: Here's What Analysts Think Will Happen Next

Sega Sammy Holdings Inc. (TSE:6460) shareholders are probably feeling a little disappointed, since its shares fell 2.1% to JP¥2,829 in the week after its latest interim results. Statutory earnings per share fell badly short of expectations, coming in at JP¥27.21, some 46% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at JP¥107b. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Sega Sammy Holdings

Following last week's earnings report, Sega Sammy Holdings' ten analysts are forecasting 2025 revenues to be JP¥460.6b, approximately in line with the last 12 months. Statutory earnings per share are predicted to ascend 17% to JP¥221. In the lead-up to this report, the analysts had been modelling revenues of JP¥462.0b and earnings per share (EPS) of JP¥221 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.

There were no changes to revenue or earnings estimates or the price target of JP¥3,277, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Sega Sammy Holdings, with the most bullish analyst valuing it at JP¥3,970 and the most bearish at JP¥2,400 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 Sega Sammy Holdings' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.0% growth on an annualised basis. This is compared to a historical growth rate of 8.9% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that Sega Sammy Holdings is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Sega Sammy Holdings' revenue is expected to perform worse 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.

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 estimates - from multiple Sega Sammy Holdings analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Sega Sammy Holdings that we have uncovered.

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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.