Yokogawa Bridge Holdings Corp. Just Missed Revenue By 9.3%: Here's What Analysts Think Will Happen Next
Investors in Yokogawa Bridge Holdings Corp. (TSE:5911) had a good week, as its shares rose 2.3% to close at JP¥2,993 following the release of its quarterly results. Results look mixed - while revenue fell marginally short of analyst estimates at JP¥41b, statutory earnings were in line with expectations, at JP¥218 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Yokogawa Bridge Holdings from two analysts is for revenues of JP¥188.4b in 2027. If met, it would imply a major 24% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 3.9% to JP¥221. In the lead-up to this report, the analysts had been modelling revenues of JP¥193.4b and earnings per share (EPS) of JP¥228 in 2027. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.
See our latest analysis for Yokogawa Bridge Holdings
The analysts made no major changes to their price target of JP¥2,710, suggesting the downgrades are not expected to have a long-term impact on Yokogawa Bridge Holdings' valuation.
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. It's clear from the latest estimates that Yokogawa Bridge Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 34% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 2.1% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Yokogawa Bridge Holdings is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Yokogawa Bridge Holdings. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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 Yokogawa Bridge Holdings. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2029, which can be seen for free on our platform here.
It might also be worth considering whether Yokogawa Bridge Holdings' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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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.