Earnings Beat: Koei Tecmo Holdings Co., Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Last week saw the newest half-yearly earnings release from Koei Tecmo Holdings Co., Ltd. (TSE:3635), an important milestone in the company's journey to build a stronger business. Koei Tecmo Holdings reported JP¥16b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of JP¥23.38 beat expectations, being 8.4% higher than what the analysts expected. 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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After the latest results, the ten analysts covering Koei Tecmo Holdings are now predicting revenues of JP¥89.1b in 2026. If met, this would reflect a notable 13% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be JP¥105, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥89.3b and earnings per share (EPS) of JP¥101 in 2026. So the consensus seems to have become somewhat more optimistic on Koei Tecmo Holdings' earnings potential following these results.

See our latest analysis for Koei Tecmo Holdings

The consensus price target was unchanged at JP¥2,304, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Koei Tecmo Holdings, with the most bullish analyst valuing it at JP¥2,900 and the most bearish at JP¥1,700 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Koei Tecmo Holdings shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Koei Tecmo Holdings' growth to accelerate, with the forecast 27% annualised growth to the end of 2026 ranking favourably alongside historical growth of 6.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Koei Tecmo Holdings 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 Koei Tecmo Holdings' earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at JP¥2,304, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Koei Tecmo Holdings going out to 2028, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.