Ichigo Inc. Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected
It's been a good week for Ichigo Inc. (TSE:2337) shareholders, because the company has just released its latest half-year results, and the shares gained 5.2% to JP¥408. Revenues were JP¥40b, 12% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of JP¥40.11 being in line with what the analysts forecast. 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.
Following the latest results, Ichigo's five analysts are now forecasting revenues of JP¥115.9b in 2027. This would be a substantial 42% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 15% to JP¥48.30. Before this earnings report, the analysts had been forecasting revenues of JP¥107.8b and earnings per share (EPS) of JP¥47.25 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.
See our latest analysis for Ichigo
As a result, it might be a surprise to see thatthe analysts have cut their price target 5.3% to JP¥450, which could suggest the forecast improvement in performance is not expected to last. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Ichigo, with the most bullish analyst valuing it at JP¥490 and the most bearish at JP¥410 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Ichigo's rate of growth is expected to accelerate meaningfully, with the forecast 102% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 12% 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 4.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Ichigo 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 Ichigo's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Ichigo's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Ichigo analysts - 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 Ichigo (of which 1 is potentially serious!) 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.