Analysts Have Made A Financial Statement On Disco Corporation's (TSE:6146) Third-Quarter Report

The analysts might have been a bit too bullish on Disco Corporation (TSE:6146), given that the company fell short of expectations when it released its quarterly results last week. Disco missed analyst forecasts, with revenues of JP¥94b and statutory earnings per share (EPS) of JP¥294, falling short by 4.6% and 2.2% respectively. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Disco

Taking into account the latest results, the consensus forecast from Disco's 15 analysts is for revenues of JP¥439.1b in 2026. This reflects a solid 17% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 19% to JP¥1,320. Before this earnings report, the analysts had been forecasting revenues of JP¥440.3b and earnings per share (EPS) of JP¥1,322 in 2026. 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¥51,618, 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. The most optimistic Disco analyst has a price target of JP¥66,000 per share, while the most pessimistic values it at JP¥37,000. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Disco's past performance and to peers in the same industry. We would highlight that Disco's revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2026 being well below the historical 19% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.3% annually. Even after the forecast slowdown in growth, it seems obvious that Disco is also expected to grow faster than 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Disco going out to 2027, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for Disco that you need to be mindful of.

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

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.