Results: Lion Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates

Last week, you might have seen that Lion Corporation (TSE:4912) released its quarterly result to the market. The early response was not positive, with shares down 6.2% to JP¥1,321 in the past week. Revenues were JP¥93b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at JP¥12.72, an impressive 70% ahead of estimates. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Lion

After the latest results, the eight analysts covering Lion are now predicting revenues of JP¥414.2b in 2024. If met, this would reflect a credible 2.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 15% to JP¥68.82. In the lead-up to this report, the analysts had been modelling revenues of JP¥416.2b and earnings per share (EPS) of JP¥69.30 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥1,540. 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 Lion at JP¥1,800 per share, while the most bearish prices it at JP¥1,300. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Lion's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Lion'shistorical trends, as the 3.1% annualised revenue growth to the end of 2024 is roughly in line with the 3.5% 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 5.1% per year. So although Lion is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

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. The consensus price target held steady at JP¥1,540, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Lion going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for Lion you should be aware 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.