Square Enix Holdings Co., Ltd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Investors in Square Enix Holdings Co., Ltd. (TSE:9684) had a good week, as its shares rose 8.7% to close at JP¥6,979 following the release of its third-quarter results. Revenues were JP¥91b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of JP¥108 were also better than expected, beating analyst predictions by 20%. 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.

See our latest analysis for Square Enix Holdings

Following the recent earnings report, the consensus from 13 analysts covering Square Enix Holdings is for revenues of JP¥330.4b in 2026. This implies a small 4.9% decline in revenue compared to the last 12 months. Per-share earnings are expected to jump 150% to JP¥268. In the lead-up to this report, the analysts had been modelling revenues of JP¥330.6b and earnings per share (EPS) of JP¥271 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.

There were no changes to revenue or earnings estimates or the price target of JP¥5,954, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Square Enix Holdings at JP¥8,000 per share, while the most bearish prices it at JP¥4,370. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.9% by the end of 2026. This indicates a significant reduction from annual growth of 3.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 13% annually for the foreseeable future. It's pretty clear that Square Enix Holdings' revenues are expected to perform substantially worse than the wider 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Square Enix Holdings' revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥5,954, with the latest estimates not enough to have an impact on their price targets.

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 Square Enix Holdings analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Square Enix Holdings .

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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.