Square Enix Holdings Co., Ltd. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
Square Enix Holdings Co., Ltd. (TSE:9684) investors will be delighted, with the company turning in some strong numbers with its latest results. Square Enix Holdings delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting JP¥78b-17% above indicated-andJP¥36.73-78% above forecasts- respectively This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Square Enix Holdings after the latest results.
Following last week's earnings report, Square Enix Holdings' 17 analysts are forecasting 2027 revenues to be JP¥313.2b, approximately in line with the last 12 months. Per-share earnings are expected to rise 6.4% to JP¥112. In the lead-up to this report, the analysts had been modelling revenues of JP¥302.3b and earnings per share (EPS) of JP¥102 in 2027. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a decent improvement in earnings per share in particular.
View our latest analysis for Square Enix Holdings
With these upgrades, we're not surprised to see that the analysts have lifted their price target 7.8% to JP¥2,666per share. 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 Square Enix Holdings, with the most bullish analyst valuing it at JP¥3,200 and the most bearish at JP¥2,100 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2027 compared to the historical decline of 2.8% 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 see their revenue grow 4.1% per year. So while a broad number of companies are forecast to grow, unfortunately Square Enix Holdings is expected to see its revenue affected worse than other companies in the industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Square Enix Holdings' earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Square Enix Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for Square Enix Holdings going out to 2029, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.