JP¥1,590: That's What Analysts Think LITALICO Inc. (TSE:7366) Is Worth After Its Latest Results

LITALICO Inc. (TSE:7366) shareholders are probably feeling a little disappointed, since its shares fell 4.8% to JP¥1,113 in the week after its latest interim results. LITALICO reported in line with analyst predictions, delivering revenues of JP¥17b and statutory earnings per share of JP¥99.38, suggesting the business is executing well and in line with its plan. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for LITALICO

Taking into account the latest results, the most recent consensus for LITALICO from four analysts is for revenues of JP¥35.7b in 2025. If met, it would imply a decent 11% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to drop 14% to JP¥55.34 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥35.4b and earnings per share (EPS) of JP¥84.81 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

It might be a surprise to learn that the consensus price target fell 49% to JP¥1,590, with the analysts clearly linking lower forecast earnings to the performance of the stock price. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic LITALICO analyst has a price target of JP¥2,120 per share, while the most pessimistic values it at JP¥1,060. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that LITALICO's rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 19% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect LITALICO to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for LITALICO. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for LITALICO going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for LITALICO (1 makes us a bit uncomfortable) 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.