MTG Co., Ltd. Just Beat Revenue By 14%: Here's What Analysts Think Will Happen Next
It's been a good week for MTG Co., Ltd. (TSE:7806) shareholders, because the company has just released its latest third-quarter results, and the shares gained 7.4% to JP¥7,710. MTG beat revenue forecasts by a solid 14% to hit JP¥36b. Statutory earnings per share came in at JP¥202, in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, MTG's four analysts are now forecasting revenues of JP¥164.9b in 2027. This would be a huge 26% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 6.3% to JP¥321. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥162.9b and earnings per share (EPS) of JP¥327 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
See our latest analysis for MTG
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 8.5% to JP¥8,270. It looks as though they previously had some doubts over whether the business would live up to their expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on MTG, with the most bullish analyst valuing it at JP¥8,340 and the most bearish at JP¥8,200 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company 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. We can infer from the latest estimates that forecasts expect a continuation of MTG'shistorical trends, as the 20% annualised revenue growth to the end of 2027 is roughly in line with the 23% 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 4.0% per year. So although MTG 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 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. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on MTG. Long-term earnings power is much more important than next year's profits. We have forecasts for MTG going out to 2028, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for MTG 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.