Earnings Miss: M3, Inc. Missed EPS By 14% And Analysts Are Revising Their Forecasts

M3, Inc. (TSE:2413) came out with its half-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was not a great result overall. While revenues of JP¥182b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 14% to hit JP¥16.38 per share. 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. 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 most recent consensus for M3 from twelve analysts is for revenues of JP¥388.2b in 2027. If met, it would imply a credible 7.1% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to ascend 11% to JP¥77.03. In the lead-up to this report, the analysts had been modelling revenues of JP¥388.2b and earnings per share (EPS) of JP¥77.03 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.

View our latest analysis for M3

There were no changes to revenue or earnings estimates or the price target of JP¥1,969, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on M3, with the most bullish analyst valuing it at JP¥2,850 and the most bearish at JP¥1,600 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of M3'shistorical trends, as the 15% annualised revenue growth to the end of 2027 is roughly in line with the 13% 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 11% per year. So although M3 is expected to maintain its revenue growth rate, it's definitely expected to grow faster than 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at JP¥1,969, with the latest estimates not enough to have an impact on their price targets.

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 M3 going out to 2029, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for M3 that you should be aware of.

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