freee K.K. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
The investors in freee K.K.'s (TSE:4478) will be rubbing their hands together with glee today, after the share price leapt 22% to JP¥3,345 in the week following its yearly results. It looks like a credible result overall - although revenues of JP¥42b were what the analysts expected, freee K.K surprised by delivering a (statutory) profit of JP¥18.20 per share, an impressive 39% above what was forecast. 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 freee K.K's eleven analysts is for revenues of JP¥50.8b in 2027. This would reflect a meaningful 20% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 161% to JP¥47.37. In the lead-up to this report, the analysts had been modelling revenues of JP¥50.7b and earnings per share (EPS) of JP¥50.00 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.
See our latest analysis for freee K.K
It might be a surprise to learn that the consensus price target fell 7.8% to JP¥2,960, with the analysts clearly linking lower forecast earnings to the performance of the stock price. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values freee K.K at JP¥4,400 per share, while the most bearish prices it at JP¥2,000. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. It's pretty clear that there is an expectation that freee K.K's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 20% growth on an annualised basis. This is compared to a historical growth rate of 27% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 10% per year. So it's pretty clear that, while freee K.K's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
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. 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. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for freee K.K going out to 2029, and you can see them free on our platform here..
You still need to take note of risks, for example - freee K.K has 2 warning signs we think you should be aware of.
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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.