DeNA Co., Ltd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

DeNA Co., Ltd. (TSE:2432) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 3.0% to hit JP¥83b. DeNA also reported a statutory profit of JP¥106, which was an impressive 65% above what the analysts had forecast. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the five analysts covering DeNA provided consensus estimates of JP¥158.8b revenue in 2026, which would reflect a considerable 10% decline over the past 12 months. Statutory earnings per share are expected to plunge 29% to JP¥282 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥158.9b and earnings per share (EPS) of JP¥263 in 2026. So the consensus seems to have become somewhat more optimistic on DeNA's earnings potential following these results.

Check out our latest analysis for DeNA

There's been no major changes to the consensus price target of JP¥3,222, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. Currently, the most bullish analyst values DeNA at JP¥4,500 per share, while the most bearish prices it at JP¥2,070. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the DeNA's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 19% annualised decline to the end of 2026. That is a notable change from historical growth of 4.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.6% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - DeNA is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards DeNA following these results. 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¥3,222, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for DeNA going out to 2028, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for DeNA you should know about.

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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.