The MegaChips Corporation (TSE:6875) Analysts Have Been Trimming Their Sales Forecasts

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. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

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Following the latest downgrade, MegaChips' four analysts currently expect revenues in 2026 to be JP¥45b, approximately in line with the last 12 months. Statutory earnings per share are supposed to plunge 33% to JP¥228 in the same period. Before this latest update, the analysts had been forecasting revenues of JP¥53b and earnings per share (EPS) of JP¥249 in 2026. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a small dip in earnings per share numbers as well.

View our latest analysis for MegaChips

Analysts made no major changes to their price target of JP¥6,633, suggesting the downgrades are not expected to have a long-term impact on MegaChips' valuation.

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. It's also worth noting that the years of declining sales look to have come to an end, with the forecast for flat revenues to the end of 2026. Historically, MegaChips' sales have shrunk approximately 7.1% annually over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 7.3% per year. Although MegaChips' revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for MegaChips. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on MegaChips after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple MegaChips analysts - going out to 2028, 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.