The SCSK Corporation (TSE:9719) First-Quarter Results Are Out And Analysts Have Published New Forecasts

SCSK Corporation (TSE:9719) shareholders are probably feeling a little disappointed, since its shares fell 4.5% to JP¥2,954 in the week after its latest quarterly results. SCSK beat revenue expectations by 2.3%, at JP¥123b. Statutory earnings per share (EPS) came in at JP¥29.52, some 2.8% short of analyst estimates. 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. 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 SCSK

Taking into account the latest results, the consensus forecast from SCSK's eleven analysts is for revenues of JP¥512.1b in 2025. This reflects a modest 4.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 10.0% to JP¥143. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥511.3b and earnings per share (EPS) of JP¥143 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of JP¥3,164, 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. Currently, the most bullish analyst values SCSK at JP¥3,400 per share, while the most bearish prices it at JP¥2,900. This is a very narrow spread of estimates, implying either that SCSK is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of SCSK'shistorical trends, as the 6.2% annualised revenue growth to the end of 2025 is roughly in line with the 5.4% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.8% per year. So it's pretty clear that SCSK is forecast to grow substantially faster than its 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 major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at JP¥3,164, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple SCSK analysts - going out to 2027, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.

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