Craftsman Automation Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Craftsman Automation Limited (NSE:CRAFTSMAN) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 8.4% to hit ₹6.8b. Craftsman Automation reported statutory earnings per share (EPS) ₹26.81, which was a notable 17% above what the analysts had forecast. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Craftsman Automation

Taking into account the latest results, the most recent consensus for Craftsman Automation from five analysts is for revenues of ₹27.6b in 2023 which, if met, would be a decent 12% increase on its sales over the past 12 months. Statutory earnings per share are predicted to surge 37% to ₹126. Before this earnings report, the analysts had been forecasting revenues of ₹26.7b and earnings per share (EPS) of ₹124 in 2023. 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.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of ₹3,186, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 Craftsman Automation analyst has a price target of ₹3,602 per share, while the most pessimistic values it at ₹2,772. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. It's pretty clear that there is an expectation that Craftsman Automation's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 34% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% annually. Even after the forecast slowdown in growth, it seems obvious that Craftsman Automation is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Craftsman Automation following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues 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.

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 Craftsman Automation going out to 2025, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with Craftsman Automation .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.