Analysts Are More Bearish On Inter Action Corporation (TSE:7725) Than They Used To Be

One thing we could say about the analysts on Inter Action Corporation (TSE:7725) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following this downgrade, Inter Action's three analysts are forecasting 2025 revenues to be JP¥7.6b, approximately in line with the last 12 months. Statutory earnings per share are supposed to drop 19% to JP¥84.05 in the same period. Previously, the analysts had been modelling revenues of JP¥8.6b and earnings per share (EPS) of JP¥111 in 2025. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Inter Action

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would also point out that the forecast 2.0% annualised revenue decline to the end of 2025 is better than the historical trend, which saw revenues shrink 2.9% annually 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 12% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Inter Action to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Inter Action, and their negativity could be grounds for caution.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Inter Action's financials, such as concerns around earnings quality. For more information, you can click here to discover this and the 3 other risks we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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