MegaChips Corporation (TSE:6875) Analysts Just Trimmed Their Revenue Forecasts By 13%

The analysts covering MegaChips Corporation (TSE:6875) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, the three analysts covering MegaChips provided consensus estimates of JP¥56b revenue in 2025, which would reflect a perceptible 3.6% decline on its sales over the past 12 months. Statutory earnings per share are presumed to increase 4.0% to JP¥258. Previously, the analysts had been modelling revenues of JP¥64b and earnings per share (EPS) of JP¥258 in 2025. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a substantial drop in revenues and reconfirming their earnings per share estimates.

Check out our latest analysis for MegaChips

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the MegaChips' past performance and to peers in the same industry. One thing that stands out from these estimates is that revenues are expected to keep falling until the end of 2025, roughly in line with the historical decline of 4.0% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 13% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect MegaChips to suffer worse than the wider industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that MegaChips' revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of MegaChips going forwards.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for MegaChips going out to 2027, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.