Lion Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Lion Corporation (TSE:4912) shareholders are probably feeling a little disappointed, since its shares fell 6.0% to JP¥1,628 in the week after its latest first-quarter results. Revenues were JP¥94b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at JP¥14.57, an impressive 36% ahead of 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Following last week's earnings report, Lion's ten analysts are forecasting 2025 revenues to be JP¥421.5b, approximately in line with the last 12 months. Statutory earnings per share are predicted to climb 10% to JP¥86.27. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥421.8b and earnings per share (EPS) of JP¥86.27 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.

View our latest analysis for Lion

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥1,984. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Lion analyst has a price target of JP¥2,220 per share, while the most pessimistic values it at JP¥1,800. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. We would highlight that Lion's revenue growth is expected to slow, with the forecast 2.4% annualised growth rate until the end of 2025 being well below the historical 3.9% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.8% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Lion.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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 Lion. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Lion analysts - going out to 2027, and you can see them free on our platform here.

You can also see our analysis of Lion's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.