SAKURA Internet Inc. Just Missed EPS By 29%: Here's What Analysts Think Will Happen Next
It's been a good week for SAKURA Internet Inc. (TSE:3778) shareholders, because the company has just released its latest half-year results, and the shares gained 6.7% to JP¥3,035. Statutory earnings per share fell badly short of expectations, coming in at JP¥26.17, some 29% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at JP¥12b. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, SAKURA Internet's three analysts are now forecasting revenues of JP¥47.7b in 2027. This would be a notable 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to crater 32% to JP¥46.57 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥47.7b and earnings per share (EPS) of JP¥80.07 in 2027. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.
See our latest analysis for SAKURA Internet
It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥5,543, 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. Currently, the most bullish analyst values SAKURA Internet at JP¥7,010 per share, while the most bearish prices it at JP¥4,076. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the SAKURA Internet's past performance and to peers in the same industry. It's clear from the latest estimates that SAKURA Internet's rate of growth is expected to accelerate meaningfully, with the forecast 26% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 16% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect SAKURA Internet to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for SAKURA Internet. 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 SAKURA Internet going out to 2029, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with SAKURA Internet , and understanding it should be part of your investment process.
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