Earnings Miss: LY Corporation Missed EPS By 13% And Analysts Are Revising Their Forecasts

LY Corporation (TSE:4689) last week reported its latest annual results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues were in line with forecasts, at JP¥1.8t, although statutory earnings per share came in 13% below what the analysts expected, at JP¥15.10 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for LY

Following the latest results, LY's 14 analysts are now forecasting revenues of JP¥1.99t in 2025. This would be a notable 9.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to climb 17% to JP¥17.71. Before this earnings report, the analysts had been forecasting revenues of JP¥2.01t and earnings per share (EPS) of JP¥17.31 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of JP¥493, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on LY, with the most bullish analyst valuing it at JP¥650 and the most bearish at JP¥400 per share. 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 LY shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that LY's revenue growth is expected to slow, with the forecast 9.6% annualised growth rate until the end of 2025 being well below the historical 14% p.a. growth over the last five years. Compare this to the 71 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 8.0% per year. So it's pretty clear that, while LY's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around LY's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

With that in mind, we wouldn't be too quick to come to a conclusion on LY. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for LY going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for LY that we have uncovered.

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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.