ARE Holdings, Inc. Just Recorded A 5.1% Revenue Beat: Here's What Analysts Think

It's been a pretty great week for ARE Holdings, Inc. (TSE:5857) shareholders, with its shares surging 12% to JP¥3,470 in the week since its latest first-quarter results. It was a workmanlike result, with revenues of JP¥197b coming in 5.1% ahead of expectations, and statutory earnings per share of JP¥315, in line with analyst appraisals. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the current consensus from ARE Holdings' three analysts is for revenues of JP¥744.3b in 2027. This would reflect a solid 18% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 5.1% to JP¥360. In the lead-up to this report, the analysts had been modelling revenues of JP¥727.7b and earnings per share (EPS) of JP¥348 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

View our latest analysis for ARE Holdings

It will come as no surprise to learn that the analysts have increased their price target for ARE Holdings 45% to JP¥6,400on the back of these upgrades.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ARE Holdings' past performance and to peers in the same industry. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 25% growth on an annualised basis. That is in line with its 26% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.2% per year. So although ARE Holdings is expected to maintain its revenue growth rate, it's definitely expected 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 ARE Holdings' earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for ARE Holdings going out to 2029, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 3 warning signs for ARE Holdings (of which 1 is concerning!) 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.