Nichias Corporation Just Beat Revenue By 19%: Here's What Analysts Think Will Happen Next
It's been a pretty great week for Nichias Corporation (TSE:5393) shareholders, with its shares surging 13% to JP¥3,591 in the week since its latest quarterly results. Nichias beat revenue forecasts by a solid 19% to hit JP¥72b. Statutory earnings per share came in at JP¥166, in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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 consensus forecast from Nichias' five analysts is for revenues of JP¥274.2b in 2027. This reflects a credible 4.7% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be JP¥179, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of JP¥273.5b and earnings per share (EPS) of JP¥178 in 2027. 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.
Check out our latest analysis for Nichias
The consensus price target rose 5.2% to JP¥4,060despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Nichias' earnings by assigning a price premium. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Nichias at JP¥4,300 per share, while the most bearish prices it at JP¥3,900. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. The analysts are definitely expecting Nichias' growth to accelerate, with the forecast 6.4% annualised growth to the end of 2027 ranking favourably alongside historical growth of 4.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.5% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Nichias to grow faster than the wider industry.
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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 Nichias going out to 2029, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for Nichias that we have uncovered.
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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.