Earnings Miss: Topcon Corporation Missed EPS And Analysts Are Revising Their Forecasts

Topcon Corporation (TSE:7732) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues missed expectations, with revenue of JP¥48b falling 12% short of forecasts. Earnings correspondingly dipped, with Topcon reporting a statutory loss of JP¥27.76 per share, where the analysts were expecting a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Topcon

Taking into account the latest results, the current consensus from Topcon's six analysts is for revenues of JP¥237.9b in 2026. This would reflect a solid 12% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 529% to JP¥103. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥237.9b and earnings per share (EPS) of JP¥103 in 2026. 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.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 20% to JP¥2,013. It looks as though they previously had some doubts over whether the business would live up to their expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Topcon at JP¥2,800 per share, while the most bearish prices it at JP¥1,300. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. It's pretty clear that there is an expectation that Topcon's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 9.2% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.2% per year. So it's pretty clear that, while Topcon's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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. We have estimates - from multiple Topcon analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Topcon has 4 warning signs (and 2 which can't be ignored) we think 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.