Square Enix Holdings Co., Ltd. (TSE:9684) just released its interim report and things are looking bullish. Square Enix Holdings delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting JP¥163b-17% above indicated-andJP¥42.47-51% above forecasts- respectively 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. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, Square Enix Holdings’ 17 analysts currently expect revenues in 2027 to be JP¥325.3b, approximately in line with the last 12 months. Statutory earnings per share are forecast to fall 10% to JP¥120 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥317.4b and earnings per share (EPS) of JP¥116 in 2027. It looks like there’s been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
See our latest analysis for Square Enix Holdings
With these upgrades, we’re not surprised to see that the analysts have lifted their price target 5.5% to JP¥3,014per share. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Square Enix Holdings analyst has a price target of JP¥3,800 per share, while the most pessimistic values it at JP¥2,300. As you can see, analysts are not all in agreement on the stock’s future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2027 compared to the historical decline of 3.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.9% per year. So it’s pretty clear that, while it does have declining revenues, the analysts also expect Square Enix Holdings to suffer worse 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 Square Enix Holdings’ earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn’t be too quick to come to a conclusion on Square Enix Holdings. Long-term earnings power is much more important than next year’s profits. We have estimates – from multiple Square Enix Holdings analysts – going out to 2029, and you can see them free on our platform here.
You can also see our analysis of Square Enix Holdings’ Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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