Analysts Are Updating Their Zensho Holdings Co., Ltd. (TSE:7550) Estimates After Its Half-Year Results

Zensho Holdings Co., Ltd. (TSE:7550) shareholders are probably feeling a little disappointed, since its shares fell 3.8% to JP¥8,970 in the week after its latest half-yearly results. Results overall were respectable, with statutory earnings of JP¥240 per share roughly in line with what the analysts had forecast. Revenues of JP¥613b came in 3.0% ahead of analyst predictions. 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'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 consensus forecast from Zensho Holdings' three analysts is for revenues of JP¥1.24t in 2026. This reflects a reasonable 4.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 21% to JP¥285. In the lead-up to this report, the analysts had been modelling revenues of JP¥1.24t and earnings per share (EPS) of JP¥296 in 2026. 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 small dip in their earnings per share forecasts.

View our latest analysis for Zensho Holdings

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥10,900, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. The most optimistic Zensho Holdings analyst has a price target of JP¥12,200 per share, while the most pessimistic values it at JP¥9,500. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 Zensho Holdings' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 8.1% growth on an annualised basis. This is compared to a historical growth rate of 16% 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) 9.1% annually. Factoring in the forecast slowdown in growth, it looks like Zensho Holdings is forecast to grow at about the same rate as 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 Zensho Holdings. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Zensho Holdings analysts - going out to 2028, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Zensho Holdings that we have uncovered.

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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.