Money Forward, Inc. (TSE:3994) Third-Quarter Results: Here's What Analysts Are Forecasting For Next Year

Simply Wall St · 10/18 22:55

The analysts might have been a bit too bullish on Money Forward, Inc. (TSE:3994), given that the company fell short of expectations when it released its third-quarter results last week. The numbers were fairly weak, with revenue of JP¥9.8b missing analyst predictions by 5.0%, and (statutory) losses of JP¥20.45 per share being slightly larger than what the analysts had expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Money Forward

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TSE:3994 Earnings and Revenue Growth October 18th 2024

Taking into account the latest results, the most recent consensus for Money Forward from nine analysts is for revenues of JP¥52.0b in 2025. If met, it would imply a sizeable 35% increase on its revenue over the past 12 months. Money Forward is also expected to turn profitable, with statutory earnings of JP¥7.18 per share. In the lead-up to this report, the analysts had been modelling revenues of JP¥52.4b and earnings per share (EPS) of JP¥10.35 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥6,900, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. The most optimistic Money Forward analyst has a price target of JP¥10,000 per share, while the most pessimistic values it at JP¥4,600. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the 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. We can infer from the latest estimates that forecasts expect a continuation of Money Forward'shistorical trends, as the 27% annualised revenue growth to the end of 2025 is roughly in line with the 32% annual growth 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 revenues grow 10% per year. So although Money Forward is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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.

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. At Simply Wall St, we have a full range of analyst estimates for Money Forward going out to 2026, and you can see them free on our platform here..

We also provide an overview of the Money Forward Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.