Socionext Inc. Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

It's shaping up to be a tough period for Socionext Inc. (TSE:6526), which a week ago released some disappointing full-year results that could have a notable impact on how the market views the stock. Socionext missed analyst forecasts, with revenues of JP¥189b and statutory earnings per share (EPS) of JP¥110, falling short by 7.4% and 3.0% respectively. 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.

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Taking into account the latest results, the current consensus from Socionext's four analysts is for revenues of JP¥204.0b in 2026. This would reflect a notable 8.2% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to dip 9.2% to JP¥100 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥207.7b and earnings per share (EPS) of JP¥101 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.

See our latest analysis for Socionext

The consensus price target fell 7.6% to JP¥2,425, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the annual results. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Socionext analyst has a price target of JP¥3,000 per share, while the most pessimistic values it at JP¥1,700. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Socionext'shistorical trends, as the 8.2% annualised revenue growth to the end of 2026 is roughly in line with the 9.1% annual growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 7.7% annually. So although Socionext is expected to maintain its revenue growth rate, it's only growing at about the rate of 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. 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. At Simply Wall St, we have a full range of analyst estimates for Socionext going out to 2028, 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 Socionext you should know about.

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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.