Trancom Co., Ltd. Beat Revenue Forecasts By 5.3%: Here's What Analysts Are Forecasting Next

Investors in Trancom Co., Ltd. (TSE:9058) had a good week, as its shares rose 7.2% to close at JP¥6,680 following the release of its first-quarter results. Results overall were respectable, with statutory earnings of JP¥485 per share roughly in line with what the analysts had forecast. Revenues of JP¥44b came in 5.3% ahead of analyst predictions. 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'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 Trancom

Following last week's earnings report, Trancom's five analysts are forecasting 2025 revenues to be JP¥173.9b, approximately in line with the last 12 months. Per-share earnings are expected to rise 4.7% to JP¥504. In the lead-up to this report, the analysts had been modelling revenues of JP¥173.0b and earnings per share (EPS) of JP¥497 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥6,552. 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. The most optimistic Trancom analyst has a price target of JP¥7,160 per share, while the most pessimistic values it at JP¥6,100. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Trancom's revenue growth is expected to slow, with the forecast 1.5% annualised growth rate until the end of 2025 being well below the historical 2.0% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.9% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Trancom.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at JP¥6,552, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Trancom. Long-term earnings power is much more important than next year's profits. We have forecasts for Trancom going out to 2027, and you can see them free on our platform here.

You can also see our analysis of Trancom's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.

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