Earnings Beat: Tosei Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

A week ago, Tosei Corporation (TSE:8923) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Statutory revenue of JP¥46b and earnings of JP¥169 both blasted past expectations, beating expectations by 41% and 67%, respectively, ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following the latest results, Tosei's four analysts are now forecasting revenues of JP¥102.3b in 2025. This would be a solid 9.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to reduce 4.7% to JP¥270 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥102.0b and earnings per share (EPS) of JP¥267 in 2025. 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.

View our latest analysis for Tosei

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥2,870. 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. There are some variant perceptions on Tosei, with the most bullish analyst valuing it at JP¥3,290 and the most bearish at JP¥2,450 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Tosei is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Tosei's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 6.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Tosei is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Tosei going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Tosei (of which 1 is significant!) you should know about.

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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.