NEXTAGE Co., Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

Investors in NEXTAGE Co., Ltd. (TSE:3186) had a good week, as its shares rose 6.6% to close at JP¥1,513 following the release of its annual results. Results overall were not great, with earnings of JP¥99.90 per share falling drastically short of analyst expectations. Meanwhile revenues hit JP¥553b and were slightly better than forecasts. 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 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¥585.4b in 2025. This would be a modest 5.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 77% to JP¥176. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥601.4b and earnings per share (EPS) of JP¥197 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 11% to JP¥2,780. 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¥4,040 per share, while the most pessimistic values it at JP¥1,540. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. It's pretty clear that there is an expectation that NEXTAGE's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 5.9% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. Compare this to the 155 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.8% per year. So it's pretty clear that, while NEXTAGE's revenue growth is expected to slow, it's expected to grow roughly in line with the 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. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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 forecasts for NEXTAGE going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 4 warning signs for NEXTAGE you should be aware of, and 1 of them is a bit concerning.

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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.