Medley, Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's shaping up to be a tough period for Medley, Inc. (TSE:4480), which a week ago released some disappointing half-yearly results that could have a notable impact on how the market views the stock. Results showed a clear earnings miss, with JP¥15b revenue coming in 2.6% lower than what the analystsexpected. Statutory earnings per share (EPS) of JP¥47.50 missed the mark badly, arriving some 29% below what was expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Medley

Taking into account the latest results, the consensus forecast from Medley's five analysts is for revenues of JP¥29.4b in 2024. This reflects a solid 20% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 22% to JP¥101. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥29.3b and earnings per share (EPS) of JP¥100 in 2024. 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.

There were no changes to revenue or earnings estimates or the price target of JP¥5,800, suggesting that the company has met expectations in its recent result. 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. Currently, the most bullish analyst values Medley at JP¥7,300 per share, while the most bearish prices it at JP¥4,800. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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 Medley's rate of growth is expected to accelerate meaningfully, with the forecast 44% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 33% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Medley to grow faster than the wider 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at JP¥5,800, with the latest estimates not enough to have an impact on their price targets.

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 Medley going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Medley .

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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.