Earnings Miss: Roland Corporation Missed EPS By 49% And Analysts Are Revising Their Forecasts

Roland Corporation (TSE:7944) missed earnings with its latest third-quarter results, disappointing overly-optimistic forecasters. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of JP¥23b missed by 14%, and statutory earnings per share of JP¥21.40 fell short of forecasts by 49%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Roland

After the latest results, the three analysts covering Roland are now predicting revenues of JP¥106.0b in 2025. If met, this would reflect a modest 5.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 35% to JP¥327. In the lead-up to this report, the analysts had been modelling revenues of JP¥106.2b and earnings per share (EPS) of JP¥349 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target fell 5.1% to JP¥4,967, with the analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Roland, with the most bullish analyst valuing it at JP¥5,800 and the most bearish at JP¥4,100 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Roland's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.2% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.7% annually. So it's pretty clear that, while Roland's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Roland. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Roland. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Roland analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Roland has 1 warning sign we think you should be aware of.

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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.