Earnings Report: Daito Pharmaceutical Co., Ltd. Missed Revenue Estimates By 15%

Investors in Daito Pharmaceutical Co., Ltd. (TSE:4577) had a good week, as its shares rose 4.0% to close at JP¥1,371 following the release of its first-quarter results. Revenues were JP¥12b, 15% below analyst expectations, although losses didn’t appear to worsen significantly, with a per-share statutory loss of JP¥107 being in line with what the analyst forecast. The analyst 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 analyst has changed their earnings models, following these results.

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Following the latest results, Daito Pharmaceutical’s lone analyst are now forecasting revenues of JP¥53.0b in 2027. This would be a credible 7.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to sink 17% to JP¥92.60 in the same period. In the lead-up to this report, the analyst had been modelling revenues of JP¥54.0b and earnings per share (EPS) of JP¥88.70 in 2027. So the consensus seems to have become somewhat more optimistic on Daito Pharmaceutical’s earnings potential following these results.

View our latest analysis for Daito Pharmaceutical

The consensus price target was unchanged at JP¥1,390, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Daito Pharmaceutical’s past performance and to peers in the same industry. It’s clear from the latest estimates that Daito Pharmaceutical’s rate of growth is expected to accelerate meaningfully, with the forecast 9.4% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 3.2% 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 3.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Daito Pharmaceutical 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 Daito Pharmaceutical’s earnings potential next year. 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. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. At least one analyst has provided forecasts out to 2029, which can be seen for free on our platform here.

You can also view our analysis of Daito Pharmaceutical’s balance sheet, and whether we think Daito Pharmaceutical is carrying too much debt, for free on our platform here.