Shareholders of V-Guard Industries Limited (NSE:VGUARD) will be pleased this week, given that the stock price is up 13% to ₹270 following its latest full-year results. It looks like the results were a bit of a negative overall. While revenues of ₹27b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 6.1% to hit ₹4.65 per share. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, V-Guard Industries' two analysts are now forecasting revenues of ₹32.2b in 2022. This would be a meaningful 18% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to jump 32% to ₹6.20. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹32.4b and earnings per share (EPS) of ₹6.40 in 2022. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
Despite cutting their earnings forecasts,the analysts have lifted their price target 5.1% to ₹261, suggesting that these impacts are not expected to weigh on the stock's value in the long term.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting V-Guard Industries' growth to accelerate, with the forecast 18% annualised growth to the end of 2022 ranking favourably alongside historical growth of 5.4% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 17% per year. V-Guard Industries is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
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 reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for V-Guard Industries going out as far as 2023, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for V-Guard Industries that you need to take into consideration.
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