GENDA Inc. Just Beat Revenue Estimates By 10%

Last week, you might have seen that GENDA Inc. (TSE:9166) released its interim result to the market. The early response was not positive, with shares down 9.4% to JP¥2,341 in the past week. It was a mildly positive result, with revenues exceeding expectations at JP¥50b, while statutory earnings per share (EPS) of JP¥63.21 were in line with analyst forecasts. 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.

See our latest analysis for GENDA

After the latest results, the dual analysts covering GENDA are now predicting revenues of JP¥109.8b in 2025. If met, this would reflect a sizeable 36% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 36% to JP¥64.50. Before this earnings report, the analysts had been forecasting revenues of JP¥104.8b and earnings per share (EPS) of JP¥67.45 in 2025. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a sizeable to revenue, the consensus also made a minor downgrade to its earnings per share forecasts.

Curiously, the consensus price target rose 100% to JP¥2,400. We can only conclude that the forecast revenue growth is expected to offset the impact of the expected fall in earnings.

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. The analysts are definitely expecting GENDA's growth to accelerate, with the forecast 85% annualised growth to the end of 2025 ranking favourably alongside historical growth of 59% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect GENDA 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 GENDA. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 GENDA going out as far as 2027, 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 3 warning signs for GENDA (1 is a bit concerning!) 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.