Trend Micro Incorporated Just Missed Earnings - But Analysts Have Updated Their Models

Last week saw the newest quarterly earnings release from Trend Micro Incorporated (TSE:4704), an important milestone in the company's journey to build a stronger business. Statutory earnings per share fell badly short of expectations, coming in at JP¥65.33, some 22% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at JP¥68b. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Trend Micro

Taking into account the latest results, the most recent consensus for Trend Micro from ten analysts is for revenues of JP¥287.1b in 2025. If met, it would imply a modest 7.3% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 61% to JP¥298. Before this earnings report, the analysts had been forecasting revenues of JP¥288.4b and earnings per share (EPS) of JP¥299 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of JP¥8,296, showing that the business is executing well and 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 Trend Micro analyst has a price target of JP¥9,168 per share, while the most pessimistic values it at JP¥7,200. This is a very narrow spread of estimates, implying either that Trend Micro is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Trend Micro's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Trend Micro's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 5.8% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 10% annually. Factoring in the forecast slowdown in growth, it seems obvious that Trend Micro is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Trend Micro's revenue is expected to perform worse 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 Trend Micro. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Trend Micro analysts - going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Trend Micro's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.