Earnings Beat: freee K.K. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Last week, you might have seen that freee K.K. (TSE:4478) released its quarterly result to the market. The early response was not positive, with shares down 6.3% to JP¥2,798 in the past week. It looks like a credible result overall - although revenues of JP¥7.4b were what the analysts expected, freee K.K surprised by delivering a statutory profit of JP¥2.90 per share, instead of the previously forecast loss. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for freee K.K

Taking into account the latest results, the consensus forecast from freee K.K's nine analysts is for revenues of JP¥33.1b in 2025. This reflects a sizeable 22% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 95% to JP¥6.26. Before this latest report, the consensus had been expecting revenues of JP¥33.1b and JP¥18.89 per share in losses. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a very favorable reduction to losses per share in particular.

There's been no major changes to the consensus price target of JP¥2,868, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on freee K.K, with the most bullish analyst valuing it at JP¥3,600 and the most bearish at JP¥2,000 per share. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of freee K.K'shistorical trends, as the 31% annualised revenue growth to the end of 2025 is roughly in line with the 28% annual growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 10% annually. So it's pretty clear that freee K.K is forecast to grow substantially faster than its 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 freee K.K. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple freee K.K analysts - going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for freee K.K 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.