Analyst Estimates: Here's What Brokers Think Of NEXON Co., Ltd. (TSE:3659) After Its First-Quarter Report

Shareholders of NEXON Co., Ltd. (TSE:3659) will be pleased this week, given that the stock price is up 15% to JP¥2,614 following its latest first-quarter results. Results look mixed - while revenue fell marginally short of analyst estimates at JP¥114b, statutory earnings beat expectations 4.3%, with NEXON reporting profits of JP¥32.12 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on NEXON after the latest results.

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After the latest results, the consensus from NEXON's 18 analysts is for revenues of JP¥438.9b in 2025, which would reflect a discernible 2.8% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to crater 29% to JP¥110 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥436.4b and earnings per share (EPS) of JP¥113 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

Check out our latest analysis for NEXON

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥2,506, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. Currently, the most bullish analyst values NEXON at JP¥3,200 per share, while the most bearish prices it at JP¥1,900. 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 NEXON shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.8% by the end of 2025. This indicates a significant reduction from annual growth of 13% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 10% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - NEXON is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that NEXON's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥2,506, 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. At Simply Wall St, we have a full range of analyst estimates for NEXON going out to 2027, and you can see them free on our platform here..

Even so, be aware that NEXON is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

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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.