JP¥3,140 - That's What Analysts Think NEXTAGE Co., Ltd. (TSE:3186) Is Worth After These Results

Shareholders might have noticed that NEXTAGE Co., Ltd. (TSE:3186) filed its half-year result this time last week. The early response was not positive, with shares down 7.1% to JP¥2,233 in the past week. Results were roughly in line with estimates, with revenues of JP¥265b and statutory earnings per share of JP¥145. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on NEXTAGE after the latest results.

View our latest analysis for NEXTAGE

Following the latest results, NEXTAGE's seven analysts are now forecasting revenues of JP¥548.8b in 2024. This would be a notable 10% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 25% to JP¥175. Before this earnings report, the analysts had been forecasting revenues of JP¥542.6b and earnings per share (EPS) of JP¥188 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 6.4% to JP¥3,140, suggesting the revised estimates are not indicative of a weaker long-term future for the business. 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. The most optimistic NEXTAGE analyst has a price target of JP¥4,000 per share, while the most pessimistic values it at JP¥2,200. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of NEXTAGE'shistorical trends, as the 21% annualised revenue growth to the end of 2024 is roughly in line with the 20% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 7.2% annually. So although NEXTAGE is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 NEXTAGE going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for NEXTAGE (1 is concerning) you should be aware of.

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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.

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