Hirose Electric Co.,Ltd. Just Missed Earnings - But Analysts Have Updated Their Models
Investors in Hirose Electric Co.,Ltd. (TSE:6806) had a good week, as its shares rose 6.5% to close at JP¥27,730 following the release of its quarterly results. Results overall were not great, with earnings of JP¥224 per share falling drastically short of analyst expectations. Meanwhile revenues hit JP¥62b and were slightly better than forecasts. 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.
Taking into account the latest results, the current consensus from Hirose ElectricLtd's 15 analysts is for revenues of JP¥242.7b in 2027. This would reflect a notable 8.2% increase on its revenue over the past 12 months. Per-share earnings are expected to climb 15% to JP¥1,171. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥236.0b and earnings per share (EPS) of JP¥1,149 in 2027. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a slight bump in to revenue forecasts.
View our latest analysis for Hirose ElectricLtd
Even though revenue forecasts increased, there was no change to the consensus price target of JP¥32,260, suggesting the analysts are focused on earnings as the driver of value creation. 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. There are some variant perceptions on Hirose ElectricLtd, with the most bullish analyst valuing it at JP¥39,000 and the most bearish at JP¥23,000 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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. It's clear from the latest estimates that Hirose ElectricLtd's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 6.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.6% annually. Hirose ElectricLtd 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 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. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 Hirose ElectricLtd going out to 2029, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 2 warning signs for Hirose ElectricLtd you should be aware 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.