Earnings Miss: DD GROUP Co., Ltd. Missed EPS By 14% And Analysts Are Revising Their Forecasts

DD GROUP Co., Ltd. (TSE:3073) shareholders are probably feeling a little disappointed, since its shares fell 5.0% to JP¥1,215 in the week after its latest full-year results. Revenues were in line with forecasts, at JP¥39b, although statutory earnings per share came in 14% below what the analyst expected, at JP¥128 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on DD GROUP after the latest results.

Our free stock report includes 1 warning sign investors should be aware of before investing in DD GROUP. Read for free now.

Taking into account the latest results, the consensus forecast from DD GROUP's lone analyst is for revenues of JP¥41.5b in 2026. This reflects a modest 7.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 3.6% to JP¥137. Before this earnings report, the analyst had been forecasting revenues of JP¥41.3b and earnings per share (EPS) of JP¥172 in 2026. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

View our latest analysis for DD GROUP

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥3,500, with the analyst clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the DD GROUP's past performance and to peers in the same industry. The analyst is definitely expecting DD GROUP's growth to accelerate, with the forecast 7.6% annualised growth to the end of 2026 ranking favourably alongside historical growth of 0.6% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 6.7% per year. DD GROUP is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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. At least one analyst has provided forecasts out to 2028, which can be seen for free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with DD GROUP , and understanding it should be part of your investment process.

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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.