M3, Inc. Just Missed EPS By 32%: Here's What Analysts Think Will Happen Next
It's shaping up to be a tough period for M3, Inc. (TSE:2413), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at JP¥90b, statutory earnings missed forecasts by an incredible 32%, coming in at just JP¥13.60 per share. 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 M3 after the latest results.
Following the latest results, M3's 13 analysts are now forecasting revenues of JP¥391.6b in 2027. This would be a notable 10% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 17% to JP¥80.88. Before this earnings report, the analysts had been forecasting revenues of JP¥393.6b and earnings per share (EPS) of JP¥81.83 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
View our latest analysis for M3
It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥2,117. 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. The most optimistic M3 analyst has a price target of JP¥2,800 per share, while the most pessimistic values it at JP¥1,600. 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.
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 M3'shistorical trends, as the 14% annualised revenue growth to the end of 2027 is roughly in line with the 13% 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 11% per year. So it's pretty clear that M3 is forecast to grow substantially faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple M3 analysts - going out to 2029, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for M3 that we have uncovered.
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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.