Organo Corporation Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

The investors in Organo Corporation's (TSE:6368) will be rubbing their hands together with glee today, after the share price leapt 26% to JP¥15,625 in the week following its quarterly results. It looks like a pretty bad result, all things considered. Although revenues of JP¥42b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 44% to hit JP¥74.73 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the consensus forecast from Organo's three analysts is for revenues of JP¥203.9b in 2027. This reflects a solid 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 8.5% to JP¥665. Before this earnings report, the analysts had been forecasting revenues of JP¥203.4b and earnings per share (EPS) of JP¥679 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

See our latest analysis for Organo

The consensus price target held steady at JP¥20,700, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Organo, with the most bullish analyst valuing it at JP¥21,400 and the most bearish at JP¥20,000 per share. This is a very narrow spread of estimates, implying either that Organo is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Organo's growth to accelerate, with the forecast 17% annualised growth to the end of 2027 ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.4% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Organo is expected to grow much faster than its industry.

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. 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 in mind, we wouldn't be too quick to come to a conclusion on Organo. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Organo analysts - going out to 2029, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Organo that we have uncovered.

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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.