Tazmo Co., Ltd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

There's been a notable change in appetite for Tazmo Co., Ltd. (TSE:6266) shares in the week since its quarterly report, with the stock down 13% to JP¥3,130. Revenues missed the mark, coming in 10% below forecasts, at JP¥8.5b. Statutory profits were a real bright spot in contrast, with per-share profits of JP¥70.07 being a notable 46% above what the analysts were modelling. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Tazmo

Taking into account the latest results, the most recent consensus for Tazmo from three analysts is for revenues of JP¥37.5b in 2025. If met, it would imply a notable 11% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 4.4% to JP¥279. In the lead-up to this report, the analysts had been modelling revenues of JP¥40.2b and earnings per share (EPS) of JP¥287 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 6.7% to JP¥4,200. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Tazmo at JP¥4,400 per share, while the most bearish prices it at JP¥4,000. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Tazmo's past performance and to peers in the same industry. We would highlight that Tazmo's revenue growth is expected to slow, with the forecast 8.4% annualised growth rate until the end of 2025 being well below the historical 12% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 10% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Tazmo.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Tazmo. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Tazmo's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Tazmo. Long-term earnings power is much more important than next year's profits. We have forecasts for Tazmo going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Tazmo you should know about.

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.