H.I.S. Co., Ltd. (TSE:9603) Just Released Its Third-Quarter Earnings: Here's What Analysts Think

The analysts might have been a bit too bullish on H.I.S. Co., Ltd. (TSE:9603), given that the company fell short of expectations when it released its quarterly results last week. Revenues missed expectations somewhat, coming in at JP¥85b, but statutory earnings fell catastrophically short, with a loss of JP¥26.98 some 529% larger than what the analysts had predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on H.I.S after the latest results.

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Following the latest results, H.I.S' five analysts are now forecasting revenues of JP¥416.3b in 2026. This would be a notable 12% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 30% to JP¥120. In the lead-up to this report, the analysts had been modelling revenues of JP¥417.0b and earnings per share (EPS) of JP¥122 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for H.I.S

There were no changes to revenue or earnings estimates or the price target of JP¥1,666, suggesting that the company has met expectations in its recent result. 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. There are some variant perceptions on H.I.S, with the most bullish analyst valuing it at JP¥1,800 and the most bearish at JP¥1,500 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting H.I.S is an easy business to forecast or the the analysts are all using similar assumptions.

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. The analysts are definitely expecting H.I.S' growth to accelerate, with the forecast 9.3% annualised growth to the end of 2026 ranking favourably alongside historical growth of 4.7% per annum 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 6.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that H.I.S is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than 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.

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 estimates - from multiple H.I.S analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for H.I.S (1 doesn't sit too well with us!) that 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.