Earnings Beat: SCREEN Holdings Co., Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
It's been a mediocre week for SCREEN Holdings Co., Ltd. (TSE:7735) shareholders, with the stock dropping 17% to JP¥9,218 in the week since its latest half-yearly results. SCREEN Holdings missed revenue estimates by 2.5%, coming in atJP¥308b, although statutory earnings per share (EPS) of JP¥199 beat expectations, coming in 9.5% ahead of analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on SCREEN Holdings after the latest results.
Taking into account the latest results, the most recent consensus for SCREEN Holdings from 16 analysts is for revenues of JP¥750.0b in 2027. If met, it would imply a solid 17% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 23% to JP¥634. In the lead-up to this report, the analysts had been modelling revenues of JP¥750.0b and earnings per share (EPS) of JP¥627 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
View our latest analysis for SCREEN Holdings
It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥17,338. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values SCREEN Holdings at JP¥25,000 per share, while the most bearish prices it at JP¥12,500. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that SCREEN Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 37% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 11% 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 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that SCREEN Holdings is expected to grow much faster than its 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at JP¥17,338, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for SCREEN Holdings going out to 2029, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with SCREEN Holdings (at least 2 which are potentially serious) , and understanding these should be part of your investment process.
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