Earnings Miss: Zensho Holdings Co., Ltd. Missed EPS By 17% And Analysts Are Revising Their Forecasts

As you might know, Zensho Holdings Co., Ltd. (TSE:7550) recently reported its annual numbers. Revenues were in line with forecasts, at JP¥1.1t, although statutory earnings per share came in 17% below what the analysts expected, at JP¥240 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the current consensus from Zensho Holdings' three analysts is for revenues of JP¥1.22t in 2026. This would reflect an okay 7.3% increase on its revenue over the past 12 months. Per-share earnings are expected to grow 12% to JP¥282. In the lead-up to this report, the analysts had been modelling revenues of JP¥1.22t and earnings per share (EPS) of JP¥293 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 minor downgrade to their earnings per share forecasts.

Check out our latest analysis for Zensho Holdings

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥10,167, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Zensho Holdings at JP¥11,000 per share, while the most bearish prices it at JP¥9,500. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Zensho Holdings is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. 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 7.3% growth on an annualised basis. This is compared to a historical growth rate of 14% 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) 8.4% annually. So it's pretty clear that, while Zensho Holdings' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Zensho Holdings. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Zensho Holdings going out to 2028, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for Zensho Holdings that you need to be mindful 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.