METAWATER Co., Ltd. Just Missed Earnings - But Analysts Have Updated Their Models
The investors in METAWATER Co., Ltd.'s (TSE:9551) will be rubbing their hands together with glee today, after the share price leapt 20% to JP¥3,655 in the week following its half-year results. It looks like a pretty bad result, all things considered. Although revenues of JP¥87b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 40% to hit JP¥17.76 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from METAWATER's five analysts is for revenues of JP¥243.7b in 2027. This would reflect a solid 10% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 29% to JP¥255. In the lead-up to this report, the analysts had been modelling revenues of JP¥241.3b and earnings per share (EPS) of JP¥239 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
See our latest analysis for METAWATER
There's been no major changes to the consensus price target of JP¥3,843, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 METAWATER, with the most bullish analyst valuing it at JP¥4,500 and the most bearish at JP¥3,420 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting METAWATER's growth to accelerate, with the forecast 22% annualised growth to the end of 2027 ranking favourably alongside historical growth of 10.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that METAWATER is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards METAWATER following these results. 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. The consensus price target held steady at JP¥3,843, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on METAWATER. Long-term earnings power is much more important than next year's profits. We have forecasts for METAWATER going out to 2029, and you can see them free on our platform here.
Even so, be aware that METAWATER is showing 2 warning signs in our investment analysis , you should know about...
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