METAWATER Co., Ltd. (TSE:9551) Just Reported And Analysts Have Been Lifting Their Price Targets

METAWATER Co., Ltd. (TSE:9551) shareholders are probably feeling a little disappointed, since its shares fell 3.0% to JP¥3,085 in the week after its latest first-quarter results. Revenues of JP¥38b came in a modest 2.3% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of JP¥16.29 coming in a substantial 27% smaller than what the analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

After the latest results, the five analysts covering METAWATER are now predicting revenues of JP¥241.3b in 2027. If met, this would reflect a meaningful 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 10% to JP¥238. In the lead-up to this report, the analysts had been modelling revenues of JP¥242.0b and earnings per share (EPS) of JP¥228 in 2027. So the consensus seems to have become somewhat more optimistic on METAWATER's earnings potential following these results.

See our latest analysis for METAWATER

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 14% to JP¥3,780. 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. Currently, the most bullish analyst values METAWATER at JP¥4,400 per share, while the most bearish prices it at JP¥3,420. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting METAWATER is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the METAWATER's past performance and to peers in the same industry. It's clear from the latest estimates that METAWATER's rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 9.5% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect METAWATER to grow faster than the wider industry.

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 METAWATER 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. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for METAWATER going out to 2029, and you can see them free on our platform here.

You can also see our analysis of METAWATER's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.