Koei Tecmo Holdings Co., Ltd. Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Koei Tecmo Holdings Co., Ltd. (TSE:3635) shareholders are probably feeling a little disappointed, since its shares fell 4.5% to JP¥1,993 in the week after its latest quarterly results. Revenues were JP¥15b, 15% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of JP¥119 being in line with what the analysts forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 eight analysts covering Koei Tecmo Holdings are now predicting revenues of JP¥90.4b in 2026. If met, this would reflect a meaningful 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 4.3% to JP¥99.24. In the lead-up to this report, the analysts had been modelling revenues of JP¥91.1b and earnings per share (EPS) of JP¥99.35 in 2026. 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.

See our latest analysis for Koei Tecmo Holdings

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥2,344. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Koei Tecmo Holdings, with the most bullish analyst valuing it at JP¥2,690 and the most bearish at JP¥1,900 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Koei Tecmo Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 8.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Koei Tecmo Holdings is expected to grow much faster than its 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 major changes to revenue forecasts, with the business still expected to grow faster than the wider 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Koei Tecmo Holdings analysts - going out to 2028, and you can see them free on our platform here.

We also provide an overview of the Koei Tecmo Holdings Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.