Money Forward, Inc. (TSE:3994) First-Quarter Results: Here's What Analysts Are Forecasting For This Year

It's been a mediocre week for Money Forward, Inc. (TSE:3994) shareholders, with the stock dropping 11% to JP¥5,625 in the week since its latest quarterly results. Revenue of JP¥9.5b came in 2.3% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of JP¥24.33, a 12% miss. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Money Forward after the latest results.

See our latest analysis for Money Forward

Taking into account the latest results, the consensus forecast from Money Forward's nine analysts is for revenues of JP¥41.2b in 2024. This reflects a sizeable 24% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 62% to JP¥41.48. Before this earnings announcement, the analysts had been modelling revenues of JP¥41.1b and losses of JP¥44.69 per share in 2024. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.

The average price target held steady at JP¥7,325, seeming to indicate that business is performing in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Money Forward analyst has a price target of JP¥8,900 per share, while the most pessimistic values it at JP¥6,000. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 34% growth on an annualised basis. That is in line with its 33% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 10% annually. So although Money Forward is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 Money Forward. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Money Forward analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Money Forward that 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.