freee K.K. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Investors in freee K.K. (TSE:4478) had a good week, as its shares rose 8.1% to close at JP¥3,530 following the release of its quarterly results. freee K.K beat expectations by 3.1% with revenues of JP¥9.7b. It also surprised on the earnings front, with an unexpected statutory profit of JP¥2.61 per share a nice improvement on the losses that the analysts forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the consensus forecast from freee K.K's eleven analysts is for revenues of JP¥41.5b in 2026. This reflects a solid 16% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to crater 31% to JP¥15.70 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥41.4b and earnings per share (EPS) of JP¥16.87 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

See our latest analysis for freee K.K

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥4,000, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on freee K.K, with the most bullish analyst valuing it at JP¥4,900 and the most bearish at JP¥2,900 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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 would highlight that freee K.K's revenue growth is expected to slow, with the forecast 22% annualised growth rate until the end of 2026 being well below the historical 28% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% per year. Even after the forecast slowdown in growth, it seems obvious that freee K.K is also expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for freee K.K. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for freee K.K going out to 2028, and you can see them free on our platform here..

Even so, be aware that freee K.K is showing 1 warning sign in our investment analysis , you should know about...

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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.