Results: Money Forward, Inc. Delivered A Surprise Loss And Now Analysts Have New Forecasts
Money Forward, Inc. (TSE:3994) shareholders are probably feeling a little disappointed, since its shares fell 5.5% to JP¥6,453 in the week after its latest third-quarter results. The results don't look great, especially considering that the analysts had been forecasting a profit and Money Forward delivered a statutory loss of JP¥1.01 per share. Revenues of JP¥18b did beat expectations by 9.3% though. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Money Forward's eleven analysts is for revenues of JP¥74.1b in 2027. This reflects a notable 20% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to dive 36% to JP¥63.34 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥73.7b and earnings per share (EPS) of JP¥60.96 in 2027. So the consensus seems to have become somewhat more optimistic on Money Forward's earnings potential following these results.
View our latest analysis for Money Forward
There's been no major changes to the consensus price target of JP¥6,155, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Money Forward, with the most bullish analyst valuing it at JP¥8,400 and the most bearish at JP¥4,300 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Money Forward's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 27% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% annually. So it's pretty clear that, while Money Forward'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 here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Money Forward 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¥6,155, with the latest estimates not enough to have an impact on their price targets.
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 Money Forward analysts - going out to 2028, and you can see them free on our platform here.
You still need to take note of risks, for example - Money Forward has 2 warning signs (and 1 which can't be ignored) we think you should know about.
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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.