Results: Iriso Electronics Co., Ltd. Exceeded Expectations And The Consensus Has Updated Its Estimates

As you might know, Iriso Electronics Co., Ltd. (TSE:6908) just kicked off its latest half-yearly results with some very strong numbers. The company beat expectations with revenues of JP¥27b arriving 4.3% ahead of forecasts. Statutory earnings per share (EPS) were JP¥31.27, 5.8% ahead of 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Iriso Electronics after the latest results.

Check out our latest analysis for Iriso Electronics

Taking into account the latest results, Iriso Electronics' seven analysts currently expect revenues in 2025 to be JP¥55.0b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be JP¥154, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of JP¥54.2b and earnings per share (EPS) of JP¥159 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at JP¥3,150, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Iriso Electronics analyst has a price target of JP¥4,000 per share, while the most pessimistic values it at JP¥2,600. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. It's pretty clear that there is an expectation that Iriso Electronics' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.6% growth on an annualised basis. This is compared to a historical growth rate of 9.6% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.3% per year. Factoring in the forecast slowdown in growth, it seems obvious that Iriso Electronics is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Iriso Electronics. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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 Iriso Electronics. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Iriso Electronics analysts - going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Iriso Electronics that you need to take into consideration.

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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.