M3, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

M3, Inc. (TSE:2413) just released its quarterly report and things are looking bullish. M3 beat earnings, with revenues hitting JP¥81b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 12%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on M3 after the latest results.

View our latest analysis for M3

Following the latest results, M3's twelve analysts are now forecasting revenues of JP¥332.8b in 2026. This would be a sizeable 25% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 16% to JP¥70.54. Before this earnings report, the analysts had been forecasting revenues of JP¥318.6b and earnings per share (EPS) of JP¥69.33 in 2026. There doesn't appear to have been a major change in sentiment following the results, other than the small lift in revenue estimates.

Even though revenue forecasts increased, there was no change to the consensus price target of JP¥1,843, suggesting the analysts are focused on earnings as the driver of value creation. 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. There are some variant perceptions on M3, with the most bullish analyst valuing it at JP¥3,050 and the most bearish at JP¥1,400 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. The analysts are definitely expecting M3's growth to accelerate, with the forecast 20% annualised growth to the end of 2026 ranking favourably alongside historical growth of 13% 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 13% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that M3 is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is 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.

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 forecasts for M3 going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with M3 , and understanding it should be part of your investment process.

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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.