Revenue Beat: IDOM Inc. Beat Analyst Estimates By 8.8%
It's been a sad week for IDOM Inc. (TSE:7599), who've watched their investment drop 16% to JP¥959 in the week since the company reported its half-yearly result. It was a workmanlike result, with revenues of JP¥158b coming in 8.8% ahead of expectations, and statutory earnings per share of JP¥119, in line with analyst appraisals. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on IDOM after the latest results.
Taking into account the latest results, the current consensus from IDOM's five analysts is for revenues of JP¥639.9b in 2027. This would reflect an okay 5.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 7.1% to JP¥127. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥630.3b and earnings per share (EPS) of JP¥138 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
Check out our latest analysis for IDOM
It might be a surprise to learn that the consensus price target fell 7.3% to JP¥1,580, with the analysts clearly linking lower forecast earnings to the performance of the stock price. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values IDOM at JP¥2,000 per share, while the most bearish prices it at JP¥1,000. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that IDOM'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 6.4% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 8.8% per year. IDOM 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 biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for IDOM. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of IDOM's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for IDOM going out to 2029, and you can see them free on our platform here.
It is also worth noting that we have found 3 warning signs for IDOM (1 is significant!) that you need to take into consideration.
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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.