Earnings Beat: Dixon Technologies (India) Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Dixon Technologies (India) Limited (NSE:DIXON) just released its quarterly report and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 10% higher than the analysts had forecast, at ₹16b, while EPS were ₹44.28 beating analyst models by 34%. The analysts 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Dixon Technologies (India)

Taking into account the latest results, the most recent consensus for Dixon Technologies (India) from twelve analysts is for revenues of ₹53.8b in 2021 which, if met, would be a sizeable 34% increase on its sales over the past 12 months. Per-share earnings are expected to leap 37% to ₹128. In the lead-up to this report, the analysts had been modelling revenues of ₹51.1b and earnings per share (EPS) of ₹106 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a massive increase in earnings per share in particular.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.9% to ₹9,662per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Dixon Technologies (India) analyst has a price target of ₹12,858 per share, while the most pessimistic values it at ₹5,000. 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.

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 Dixon Technologies (India)'s rate of growth is expected to accelerate meaningfully, with the forecast 34% revenue growth noticeably faster than its historical growth of 17%p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 17% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Dixon Technologies (India) 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 Dixon Technologies (India)'s earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 Dixon Technologies (India) going out to 2025, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for Dixon Technologies (India) that you need to take into consideration.

If you decide to trade Dixon Technologies (India), use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.