DeNA Co., Ltd. (TSE:2432) Just Released Its Yearly Earnings: Here's What Analysts Think

Last week saw the newest full-year earnings release from DeNA Co., Ltd. (TSE:2432), an important milestone in the company's journey to build a stronger business. It was a pretty bad result overall; while revenues were in line with expectations at JP¥137b, statutory losses exploded to JP¥258 per share. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for DeNA

Taking into account the latest results, the current consensus from DeNA's seven analysts is for revenues of JP¥141.4b in 2025. This would reflect a satisfactory 3.4% increase on its revenue over the past 12 months. DeNA is also expected to turn profitable, with statutory earnings of JP¥88.10 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥139.2b and earnings per share (EPS) of JP¥76.01 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice increase in earnings per share expectations following these results.

The consensus price target was unchanged at JP¥1,725, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. There are some variant perceptions on DeNA, with the most bullish analyst valuing it at JP¥2,000 and the most bearish at JP¥1,440 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 clear from the latest estimates that DeNA's rate of growth is expected to accelerate meaningfully, with the forecast 3.4% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 2.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 4.5% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, DeNA is expected to grow slower 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 DeNA's earnings potential next year. 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¥1,725, 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 DeNA. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for DeNA 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 1 warning sign with DeNA , and understanding it should be part of your investment process.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.