Earnings Beat: SoftBank Group Corp. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

SoftBank Group Corp. (TSE:9984) shareholders are probably feeling a little disappointed, since its shares fell 4.1% to JP¥8,843 in the week after its latest half-year results. Revenues were JP¥3.5t, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at JP¥803, an impressive 689% ahead of estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for SoftBank Group

Taking into account the latest results, SoftBank Group's 13 analysts currently expect revenues in 2025 to be JP¥7.13t, approximately in line with the last 12 months. Statutory earnings per share are forecast to plummet 91% to JP¥137 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥7.09t and earnings per share (EPS) of JP¥181 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

The consensus price target held steady at JP¥11,579, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values SoftBank Group at JP¥14,520 per share, while the most bearish prices it at JP¥8,800. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that SoftBank Group's rate of growth is expected to accelerate meaningfully, with the forecast 3.6% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 1.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.5% annually. SoftBank Group is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for SoftBank Group. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at JP¥11,579, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple SoftBank Group analysts - going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 4 warning signs for SoftBank Group (of which 2 are significant!) 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.