Mercari, Inc. Just Beat EPS By 46%: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Mercari, Inc. (TSE:4385) released its yearly result to the market. The early response was not positive, with shares down 8.4% to JP¥2,134 in the past week. Revenues were JP¥193b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at JP¥159, an impressive 46% ahead of estimates. 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 Mercari after the latest results.

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Following the latest results, Mercari's 13 analysts are now forecasting revenues of JP¥208.9b in 2026. This would be a solid 8.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to descend 18% to JP¥131 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥208.4b and earnings per share (EPS) of JP¥132 in 2026. 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 Mercari

The analysts reconfirmed their price target of JP¥2,762, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Mercari analyst has a price target of JP¥3,500 per share, while the most pessimistic values it at JP¥1,800. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Mercari's revenue growth is expected to slow, with the forecast 8.4% annualised growth rate until the end of 2026 being well below the historical 16% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.6% per year. Even after the forecast slowdown in growth, it seems obvious that Mercari is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share 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 in mind, we wouldn't be too quick to come to a conclusion on Mercari. Long-term earnings power is much more important than next year's profits. We have forecasts for Mercari going out to 2028, 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 Mercari that 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.