JP¥2,250: That's What Analysts Think Demae-Can Co.,Ltd (TYO:2484) Is Worth After Its Latest Results

Last week, you might have seen that Demae-Can Co.,Ltd (TYO:2484) released its half-yearly result to the market. The early response was not positive, with shares down 5.6% to JP¥2,231 in the past week. Revenues were JP¥6.2b, and Demae-CanLtd came in a solid 15% ahead of expectations. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Demae-CanLtd

Following the latest results, Demae-CanLtd's twin analysts are now forecasting revenues of JP¥24.4b in 2021. This would be a substantial 44% improvement in sales compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to JP¥165. Before this earnings announcement, the analysts had been modelling revenues of JP¥24.1b and losses of JP¥151 per share in 2021. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although sales forecasts held steady, the consensus also made a pronounced increase to its losses per share forecasts.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 14% to JP¥2,250, with the analysts signalling that growing losses would be a definite concern.

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. The analysts are definitely expecting Demae-CanLtd's growth to accelerate, with the forecast 107% annualised growth to the end of 2021 ranking favourably alongside historical growth of 26% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Demae-CanLtd is expected to grow much faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Demae-CanLtd. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Demae-CanLtd going out as far as 2025, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Demae-CanLtd (1 shouldn't be ignored!) that you need to take into consideration.

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This article by Simply Wall St is general in nature. 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.
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