Earnings Update: Here's Why Analysts Just Lifted Their Acom Co., Ltd. (TSE:8572) Price Target To JP¥403

Last week saw the newest half-year earnings release from Acom Co., Ltd. (TSE:8572), an important milestone in the company's journey to build a stronger business. Acom reported in line with analyst predictions, delivering revenues of JP¥79b and statutory earnings per share of JP¥33.89, suggesting the business is executing well and in line with its plan. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Acom

Taking into account the latest results, the current consensus from Acom's three analysts is for revenues of JP¥315.0b in 2025. This would reflect a credible 2.7% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to dip 7.8% to JP¥32.77 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥315.0b and earnings per share (EPS) of JP¥26.75 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the massive increase in earnings per share expectations following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 8.3% to JP¥403. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Acom analyst has a price target of JP¥410 per share, while the most pessimistic values it at JP¥400. 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.

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. It's clear from the latest estimates that Acom's rate of growth is expected to accelerate meaningfully, with the forecast 5.5% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 1.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Acom is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Acom following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Acom. 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 Acom going out to 2027, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with Acom (including 1 which is concerning) .

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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.