Koei Tecmo Holdings Co., Ltd. Just Missed EPS By 14%: Here's What Analysts Think Will Happen Next

Koei Tecmo Holdings Co., Ltd. (TSE:3635) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. It looks like a clear earnings miss, with both revenues and earnings falling well short of analyst predictions. Revenues of JP¥17b missed by 10%, and statutory earnings per share of JP¥29.09 fell short of forecasts by 14%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Koei Tecmo Holdings

Following the latest results, Koei Tecmo Holdings' seven analysts are now forecasting revenues of JP¥84.1b in 2026. This would be a meaningful 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to reduce 7.1% to JP¥102 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥83.2b and earnings per share (EPS) of JP¥96.83 in 2026. So the consensus seems to have become somewhat more optimistic on Koei Tecmo Holdings' earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 11% to JP¥1,735. 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. The most optimistic Koei Tecmo Holdings analyst has a price target of JP¥2,400 per share, while the most pessimistic values it at JP¥1,320. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. 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 2026 expected to display 8.5% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% per year. Factoring in the forecast slowdown in growth, it seems obvious that Koei Tecmo Holdings is also expected to grow slower than other industry participants.

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 Koei Tecmo Holdings 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. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Koei Tecmo Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Koei Tecmo Holdings analysts - going out to 2027, 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.