Round One Corporation Just Missed Earnings - But Analysts Have Updated Their Models

Round One Corporation (TSE:4680) shareholders are probably feeling a little disappointed, since its shares fell 5.7% to JP¥997 in the week after its latest half-yearly results. Revenues were in line with forecasts, at JP¥92b, although statutory earnings per share came in 11% below what the analysts expected, at JP¥20.76 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the most recent consensus for Round One from six analysts is for revenues of JP¥188.2b in 2026. If met, it would imply a modest 2.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 17% to JP¥69.75. In the lead-up to this report, the analysts had been modelling revenues of JP¥192.4b and earnings per share (EPS) of JP¥70.27 in 2026. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

View our latest analysis for Round One

The average price target was reduced 6.5% to JP¥1,527, with the lower revenue forecasts indicating negative sentiment towards Round One, even though earnings forecasts were unchanged. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Round One analyst has a price target of JP¥1,720 per share, while the most pessimistic values it at JP¥1,240. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Round One's past performance and to peers in the same industry. We would highlight that Round One's revenue growth is expected to slow, with the forecast 5.8% annualised growth rate until the end of 2026 being well below the historical 21% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.2% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Round One.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Round One's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Round One. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Round One analysts - going out to 2028, and you can see them free on our platform here.

Even so, be aware that Round One 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.