Earnings Report: TOMY Company, Ltd. Missed Revenue Estimates By 5.6%

It's been a mediocre week for TOMY Company, Ltd. (TSE:7867) shareholders, with the stock dropping 19% to JP¥4,072 in the week since its latest third-quarter results. Results look mixed - while revenue fell marginally short of analyst estimates at JP¥74b, statutory earnings were in line with expectations, at JP¥108 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on TOMY Company after the latest results.

Check out our latest analysis for TOMY Company

Taking into account the latest results, the most recent consensus for TOMY Company from three analysts is for revenues of JP¥281.1b in 2026. If met, it would imply a meaningful 16% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 41% to JP¥240. In the lead-up to this report, the analysts had been modelling revenues of JP¥282.1b and earnings per share (EPS) of JP¥231 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 8.1% to JP¥4,920, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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. Currently, the most bullish analyst values TOMY Company at JP¥4,960 per share, while the most bearish prices it at JP¥4,900. This is a very narrow spread of estimates, implying either that TOMY Company is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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 clear from the latest estimates that TOMY Company's rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 9.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.8% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect TOMY Company to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards TOMY Company following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 TOMY Company going out to 2027, and you can see them free on our platform here.

Even so, be aware that TOMY Company is showing 1 warning sign in our investment analysis , you should know about...

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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.