ZOZO, Inc. Just Missed Earnings - But Analysts Have Updated Their Models

Last week, you might have seen that ZOZO, Inc. (TSE:3092) released its first-quarter result to the market. The early response was not positive, with shares down 2.4% to JP¥4,167 in the past week. Statutory earnings per share of JP¥37.41 unfortunately missed expectations by 15%, although it was encouraging to see revenues of JP¥50b exceed expectations by 2.0%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on ZOZO after the latest results.

View our latest analysis for ZOZO

Following the latest results, ZOZO's 16 analysts are now forecasting revenues of JP¥213.8b in 2025. This would be a credible 6.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 3.0% to JP¥153. Before this earnings report, the analysts had been forecasting revenues of JP¥213.4b and earnings per share (EPS) of JP¥153 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of JP¥3,784, suggesting that the company has met expectations in its recent result. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values ZOZO at JP¥4,590 per share, while the most bearish prices it at JP¥3,200. 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 ZOZO shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ZOZO's past performance and to peers in the same industry. It's pretty clear that there is an expectation that ZOZO's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.2% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.0% annually. Factoring in the forecast slowdown in growth, it looks like ZOZO is forecast to grow at about the same rate as the wider 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at JP¥3,784, with the latest estimates not enough to have an impact on their price targets.

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 forecasts for ZOZO going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with ZOZO , and understanding it should be part of your investment process.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com