Amber Enterprises India Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Amber Enterprises India Limited (NSE:AMBER) shareholders are probably feeling a little disappointed, since its shares fell 3.3% to ₹2,175 in the week after its latest quarterly results. Revenues of ₹4.1b missed forecasts by 11%, but despite this Amber Enterprises India reported a surprise statutory profit instead of the losses that the analysts had expected. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Amber Enterprises India

Taking into account the latest results, the most recent consensus for Amber Enterprises India from eleven analysts is for revenues of ₹32.7b in 2021 which, if met, would be a solid 17% increase on its sales over the past 12 months. Per-share earnings are expected to increase 7.8% to ₹22.07. In the lead-up to this report, the analysts had been modelling revenues of ₹33.8b and earnings per share (EPS) of ₹24.09 in 2021. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of ₹2,149, suggesting the downgrades are not expected to have a long-term impact on Amber Enterprises India's valuation. 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 Amber Enterprises India at ₹2,854 per share, while the most bearish prices it at ₹1,411. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Amber Enterprises India is forecast to grow faster in the future than it has in the past, with revenues expected to grow 17%. If achieved, this would be a much better result than the 22% annual decline over the past year. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 20% next year. So while Amber Enterprises India's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at ₹2,149, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Amber Enterprises India going out to 2024, 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 Amber Enterprises India , and understanding these should be part of your investment process.

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This article by Simply Wall St is general in nature. 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.
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