Earnings Report: Kraftia Corporation Missed Revenue Estimates By 9.5%
Kraftia Corporation (TSE:1959) shareholders are probably feeling a little disappointed, since its shares fell 4.3% to JP¥8,491 in the week after its latest quarterly results. Revenues came in 9.5% below expectations, at JP¥99b. Statutory earnings per share were relatively better off, with a per-share profit of JP¥119 being roughly in line with analyst estimates. 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. 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 current consensus from Kraftia's seven analysts is for revenues of JP¥504.3b in 2027. This would reflect a credible 6.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 3.1% to JP¥594. Before this earnings report, the analysts had been forecasting revenues of JP¥507.3b and earnings per share (EPS) of JP¥617 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 Kraftia
It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥11,233, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Kraftia, with the most bullish analyst valuing it at JP¥13,600 and the most bearish at JP¥7,700 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Kraftia shareholders.
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 Kraftia's growth to accelerate, with the forecast 8.5% annualised growth to the end of 2027 ranking favourably alongside historical growth of 6.1% per annum 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 4.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Kraftia is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at JP¥11,233, with the latest estimates not enough to have an impact on their price targets.
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. We have estimates - from multiple Kraftia analysts - going out to 2029, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Kraftia that you need to take into consideration.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.