Analysts Have Made A Financial Statement On Nakanishi Inc.'s (TSE:7716) First-Quarter Report

Last week saw the newest first-quarter earnings release from Nakanishi Inc. (TSE:7716), an important milestone in the company's journey to build a stronger business. Revenues came in 2.9% below expectations, at JP¥19b. Statutory earnings per share were relatively better off, with a per-share profit of JP¥101 being roughly in line with analyst estimates. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the current consensus from Nakanishi's six analysts is for revenues of JP¥81.7b in 2025. This would reflect a credible 5.5% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 79% to JP¥121. Before this earnings report, the analysts had been forecasting revenues of JP¥81.7b and earnings per share (EPS) of JP¥124 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

View our latest analysis for Nakanishi

The consensus price target held steady at JP¥2,983, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Nakanishi, with the most bullish analyst valuing it at JP¥3,500 and the most bearish at JP¥2,300 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Nakanishi shareholders.

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. It's pretty clear that there is an expectation that Nakanishi's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.4% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.0% annually. So it's pretty clear that, while Nakanishi's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Nakanishi 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 2 warning signs with Nakanishi , and understanding these 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.