Earnings Update: Decollte Holdings Corporation (TSE:7372) Just Reported And Analysts Are Trimming Their Forecasts

It's been a mediocre week for Decollte Holdings Corporation (TSE:7372) shareholders, with the stock dropping 15% to JP¥429 in the week since its latest half-year results. Revenues came in 2.4% below expectations, at JP¥2.8b. Statutory earnings per share were relatively better off, with a per-share profit of JP¥96.51 being roughly in line with analyst estimates. 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 Decollte Holdings after the latest results.

Check out our latest analysis for Decollte Holdings

Following last week's earnings report, Decollte Holdings' solitary analyst are forecasting 2024 revenues to be JP¥5.60b, approximately in line with the last 12 months. Statutory earnings per share are expected to plummet 84% to JP¥7.80 in the same period. Before this earnings report, the analyst had been forecasting revenues of JP¥6.14b and earnings per share (EPS) of JP¥70.60 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The consensus price target fell 25% to JP¥450, with the weaker earnings outlook clearly leading valuation estimates.

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. One more thing stood out to us about these estimates, and it's the idea that Decollte Holdings' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 2.8% to the end of 2024. This tops off a historical decline of 0.4% a year over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.6% per year. So it's pretty clear that, while it does have declining revenues, the analyst also expect Decollte Holdings to suffer worse than the wider industry.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Decollte Holdings. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Decollte Holdings' future valuation.

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 analyst estimates for Decollte Holdings going out as far as 2026, and you can see them free on our platform here.

It is also worth noting that we have found 4 warning signs for Decollte Holdings (1 is significant!) that you need to take into consideration.

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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.