SpiceJet Limited (NSE:SPICEJET) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates

SpiceJet Limited (NSE:SPICEJET) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Sales crushed expectations at ₹11b, beating expectations by 67%. SpiceJet reported a statutory loss of ₹1.76 per share, which - although not amazing - was much smaller than the analyst predicted. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.

View our latest analysis for SpiceJet

Taking into account the latest results, the single analyst covering SpiceJet provided consensus estimates of ₹46.9b revenue in 2021, which would reflect a substantial 43% decline on its sales over the past 12 months. Per-share losses are supposed to see a sharp uptick, reaching ₹26.71. Before this latest report, the consensus had been expecting revenues of ₹41.0b and ₹39.91 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

There was no major change to the consensus price target of ₹57.36, perhaps suggesting that the analyst remain concerned about ongoing losses despite the improved earnings and revenue outlook.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 43%, a significant reduction from annual growth of 18% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 29% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - SpiceJet is expected to lag the wider industry.

The Bottom Line

The most obvious conclusion is that the analyst made no changes to their forecasts for a loss next year. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. The consensus price target held steady at ₹57.36, with the latest estimates not enough to have an impact on their price target.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

You can also see whether SpiceJet is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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