Analyst Estimates: Here's What Brokers Think Of Socionext Inc. (TSE:6526) After Its First-Quarter Report

Socionext Inc. (TSE:6526) shareholders are probably feeling a little disappointed, since its shares fell 6.5% to JP¥2,811 in the week after its latest first-quarter results. Revenues came in 2.8% below expectations, at JP¥53b. Statutory earnings per share were relatively better off, with a per-share profit of JP¥148 being roughly in line with analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Socionext

Taking into account the latest results, the current consensus from Socionext's four analysts is for revenues of JP¥226.8b in 2025. This would reflect a satisfactory 6.7% increase on its revenue over the past 12 months. Statutory per share are forecast to be JP¥142, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥227.0b and earnings per share (EPS) of JP¥140 in 2025. 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¥3,800, suggesting that the company has met expectations in its recent result. 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 Socionext at JP¥4,700 per share, while the most bearish prices it at JP¥2,600. 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. One thing stands out from these estimates, which is that Socionext is forecast to grow faster in the future than it has in the past, with revenues expected to display 9.0% annualised growth until the end of 2025. If achieved, this would be a much better result than the 0.8% annual decline over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 12% per year. So although Socionext's revenue growth is expected to improve, it is still expected to grow slower than the 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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 Socionext. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Socionext analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Socionext has 3 warning signs we think 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.

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