NTT DATA Group Corporation Just Missed EPS By 28%: Here's What Analysts Think Will Happen Next

It's been a sad week for NTT DATA Group Corporation (TSE:9613), who've watched their investment drop 19% to JP¥1,872 in the week since the company reported its first-quarter result. Revenue of JP¥1.1t surpassed estimates by 3.6%, although statutory earnings per share missed badly, coming in 28% below expectations at JP¥15.15 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for NTT DATA Group

After the latest results, the twelve analysts covering NTT DATA Group are now predicting revenues of JP¥4.61t in 2025. If met, this would reflect a modest 3.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 12% to JP¥102. Before this earnings report, the analysts had been forecasting revenues of JP¥4.59t and earnings per share (EPS) of JP¥102 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.

There were no changes to revenue or earnings estimates or the price target of JP¥2,658, suggesting that the company has met expectations in its recent result. 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 NTT DATA Group analyst has a price target of JP¥3,300 per share, while the most pessimistic values it at JP¥2,070. 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 NTT DATA Group's revenue growth is expected to slow, with the forecast 4.3% annualised growth rate until the end of 2025 being well below the historical 16% p.a. growth over the last five years. Compare this to the 218 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.8% per year. Factoring in the forecast slowdown in growth, it looks like NTT DATA Group is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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 NTT DATA Group going out to 2027, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with NTT DATA Group (at least 1 which shouldn't be ignored) , and understanding these should be part of your investment process.

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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.