Nissha Co., Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Nissha Co., Ltd. (TSE:7915) shareholders are probably feeling a little disappointed, since its shares fell 8.6% to JP¥1,730 in the week after its latest quarterly results. It looks like a pretty bad result, all things considered. Although revenues of JP¥49b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 96% to hit JP¥1.38 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 Nissha

Taking into account the latest results, the consensus forecast from Nissha's six analysts is for revenues of JP¥199.0b in 2025. This reflects a modest 3.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 728% to JP¥148. Before this earnings report, the analysts had been forecasting revenues of JP¥201.4b and earnings per share (EPS) of JP¥157 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at JP¥2,585, 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 Nissha analyst has a price target of JP¥3,170 per share, while the most pessimistic values it at JP¥2,270. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Nissha shareholders.

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. One thing stands out from these estimates, which is that Nissha is forecast to grow faster in the future than it has in the past, with revenues expected to display 2.8% annualised growth until the end of 2025. If achieved, this would be a much better result than the 0.04% annual decline 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 revenue grow 7.5% per year. So although Nissha's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Nissha. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Nissha'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 Nissha. Long-term earnings power is much more important than next year's profits. We have forecasts for Nissha going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Nissha that you need to be mindful of.

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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.