Medley, Inc. Just Missed Earnings - But Analysts Have Updated Their Models

It's been a good week for Medley, Inc. (TSE:4480) shareholders, because the company has just released its latest quarterly results, and the shares gained 8.4% to JP¥4,010. Statutory earnings per share fell badly short of expectations, coming in at JP¥9.67, some 49% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at JP¥6.9b. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 current consensus from Medley's five analysts is for revenues of JP¥39.6b in 2025. This would reflect a sizeable 49% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 63% to JP¥136. Before this earnings report, the analysts had been forecasting revenues of JP¥39.1b and earnings per share (EPS) of JP¥135 in 2025. 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.

The analysts reconfirmed their price target of JP¥5,425, showing that the business is executing well and in line with expectations. 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. The most optimistic Medley analyst has a price target of JP¥7,400 per share, while the most pessimistic values it at JP¥3,800. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 37% growth on an annualised basis. That is in line with its 33% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 14% per year. So although Medley is expected to maintain its revenue growth rate, it's definitely expected 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. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Medley. Long-term earnings power is much more important than next year's profits. We have forecasts for Medley going out to 2026, 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 2 warning signs for Medley (1 doesn't sit too well with us!) 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.