Koei Tecmo Holdings Co., Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Koei Tecmo Holdings Co., Ltd. (TSE:3635) last week reported its latest interim results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like a pretty bad result, all things considered. Although revenues of JP¥18b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 75% to hit JP¥7.40 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Koei Tecmo Holdings

Following the latest results, Koei Tecmo Holdings' nine analysts are now forecasting revenues of JP¥83.4b in 2025. This would be a reasonable 4.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to shrink 4.5% to JP¥99.74 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥83.5b and earnings per share (EPS) of JP¥99.72 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥1,554. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Koei Tecmo Holdings analyst has a price target of JP¥1,950 per share, while the most pessimistic values it at JP¥1,240. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Koei Tecmo Holdings' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.5% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. Compare this to the 72 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 9.6% per year. So it's pretty clear that, while Koei Tecmo Holdings' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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. We have forecasts for Koei Tecmo Holdings going out to 2027, 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 Koei Tecmo Holdings 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.