Earnings Miss: Kioxia Holdings Corporation Missed EPS By 13% And Analysts Are Revising Their Forecasts

Kioxia Holdings Corporation (TSE:285A) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Kioxia Holdings missed earnings this time around, with JP¥1.8t revenue coming in 4.0% below what the analysts had modelled. Statutory earnings per share (EPS) of JP¥1,540 also fell short of expectations by 13%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the most recent consensus for Kioxia Holdings from 17 analysts is for revenues of JP¥10t in 2027. If met, it would imply a substantial 167% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 311% to JP¥10,338. In the lead-up to this report, the analysts had been modelling revenues of JP¥9.74t and earnings per share (EPS) of JP¥9,955 in 2027. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

See our latest analysis for Kioxia Holdings

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of JP¥112,994, suggesting that the forecast performance does not have a long term impact on the company'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 Kioxia Holdings, with the most bullish analyst valuing it at JP¥200,000 and the most bearish at JP¥40,000 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. The analysts are definitely expecting Kioxia Holdings' growth to accelerate, with the forecast 270% annualised growth to the end of 2027 ranking favourably alongside historical growth of 14% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Kioxia Holdings to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Kioxia Holdings' earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster 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.

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 Kioxia Holdings analysts - going out to 2029, and you can see them free on our platform here.

You still need to take note of risks, for example - Kioxia Holdings has 1 warning sign 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.