Proto Corporation Just Beat Revenue Estimates By 8.0%

Last week, you might have seen that Proto Corporation (TSE:4298) released its quarterly result to the market. The early response was not positive, with shares down 9.6% to JP¥1,300 in the past week. It was a workmanlike result, with revenues of JP¥30b coming in 8.0% ahead of expectations, and statutory earnings per share of JP¥136, in line with analyst appraisals. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Proto after the latest results.

View our latest analysis for Proto

Taking into account the latest results, Proto's three analysts currently expect revenues in 2025 to be JP¥119.6b, approximately in line with the last 12 months. Statutory earnings per share are predicted to increase 6.4% to JP¥139. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥117.1b and earnings per share (EPS) of JP¥136 in 2025. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

It will come as no surprise to learn that the analysts have increased their price target for Proto 26% to JP¥1,500on the back of these upgrades.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Proto's past performance and to peers in the same industry. We would highlight that Proto's revenue growth is expected to slow, with the forecast 1.8% annualised growth rate until the end of 2025 being well below the historical 18% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Proto 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 Proto following these results. They also upgraded their revenue estimates for next year, even though it is expected to grow slower 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.

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 Proto 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.