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Internet Initiative Japan Inc. (TSE:3774) Beat Earnings, And Analysts Have Been Reviewing Their Forecasts
Internet Initiative Japan Inc. (TSE:3774) just released its latest interim results and things are looking bullish. It was a decent earnings report, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 17% higher than the analysts had forecast, at JP¥113b, while EPS of JP¥35.95 beat analyst models by 14%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Internet Initiative Japan's ten analysts is for revenues of JP¥405.2b in 2027. This reflects an okay 2.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 3.6% to JP¥146. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥397.1b and earnings per share (EPS) of JP¥142 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.
Check out our latest analysis for Internet Initiative Japan
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of JP¥3,629, 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 Internet Initiative Japan, with the most bullish analyst valuing it at JP¥4,300 and the most bearish at JP¥3,200 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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 would highlight that Internet Initiative Japan's revenue growth is expected to slow, with the forecast 5.9% annualised growth rate until the end of 2027 being well below the historical 11% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.9% per year. Even after the forecast slowdown in growth, it seems obvious that Internet Initiative Japan is also expected 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 Internet Initiative Japan following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at JP¥3,629, 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 estimates - from multiple Internet Initiative Japan analysts - going out to 2029, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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