Earnings Update: ARE Holdings, Inc. (TSE:5857) Just Reported Its Annual Results And Analysts Are Updating Their Forecasts

ARE Holdings, Inc. (TSE:5857) shareholders are probably feeling a little disappointed, since its shares fell 8.5% to JP¥1,759 in the week after its latest yearly results. It looks like the results were a bit of a negative overall. While revenues of JP¥506b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.5% to hit JP¥187 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on ARE Holdings after the latest results.

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Taking into account the latest results, the current consensus from ARE Holdings' two analysts is for revenues of JP¥520.5b in 2026. This would reflect a modest 2.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 13% to JP¥212. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥518.0b and earnings per share (EPS) of JP¥199 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

View our latest analysis for ARE Holdings

The consensus price target was unchanged at JP¥2,300, implying that the improved earnings outlook is not expected to have a long term impact on value creation for 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. We would highlight that ARE Holdings' revenue growth is expected to slow, with the forecast 2.8% annualised growth rate until the end of 2026 being well below the historical 26% p.a. growth over the last five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 0.3% annually. Factoring in the forecast slowdown in growth, it's pretty clear that ARE Holdings is still expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around ARE Holdings' earnings potential next year. On the plus side, they made no changes to their revenue estimates - and they expect it to perform better than the wider industry. The consensus price target held steady at JP¥2,300, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on ARE Holdings. Long-term earnings power is much more important than next year's profits. We have analyst estimates for ARE Holdings going out as far as 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for ARE Holdings (1 is significant!) that we have uncovered.

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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.