NEXON Co., Ltd. Just Beat EPS By 100%: Here's What Analysts Think Will Happen Next
A week ago, NEXON Co., Ltd. (TSE:3659) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 11% higher than the analysts had forecast, at JP¥138b, while EPS were JP¥48.84 beating analyst models by 100%. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following last week's earnings report, NEXON's 18 analysts are forecasting 2027 revenues to be JP¥530.1b, approximately in line with the last 12 months. Statutory earnings per share are forecast to descend 18% to JP¥143 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥522.5b and earnings per share (EPS) of JP¥143 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
Check out our latest analysis for NEXON
There were no changes to revenue or earnings estimates or the price target of JP¥3,021, suggesting that the company has met expectations in its recent result. 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. The most optimistic NEXON analyst has a price target of JP¥3,600 per share, while the most pessimistic values it at JP¥2,270. 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 NEXON shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 0.8% annualised decline to the end of 2027. That is a notable change from historical growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.9% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - NEXON is expected to lag the wider 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that NEXON's revenue is expected to perform worse 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.
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. At Simply Wall St, we have a full range of analyst estimates for NEXON going out to 2028, and you can see them free on our platform here..
You still need to take note of risks, for example - NEXON has 3 warning signs (and 1 which can't be ignored) we think you should know about.
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