Firstsource Solutions Limited Just Missed EPS By 5.9%: Here's What Analysts Think Will Happen Next

Shareholders will be ecstatic, with their stake up 22% over the past week following Firstsource Solutions Limited's (NSE:FSL) latest quarterly results. Revenues of ₹18b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at ₹1.92, missing estimates by 5.9%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Firstsource Solutions after the latest results.

Check out our latest analysis for Firstsource Solutions

Following the latest results, Firstsource Solutions' ten analysts are now forecasting revenues of ₹74.0b in 2025. This would be a notable 12% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 16% to ₹8.79. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹72.4b and earnings per share (EPS) of ₹8.92 in 2025. There doesn't appear to have been a major change in sentiment following the results, other than the modest lift to revenue estimates.

The analysts increased their price target 20% to ₹297, perhaps signalling that higher revenues are a strong leading indicator for Firstsource Solutions's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Firstsource Solutions analyst has a price target of ₹320 per share, while the most pessimistic values it at ₹280. This is a very narrow spread of estimates, implying either that Firstsource Solutions is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. The analysts are definitely expecting Firstsource Solutions' growth to accelerate, with the forecast 16% annualised growth to the end of 2025 ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Firstsource Solutions is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also upgraded their revenue forecasts, although the latest estimates suggest that Firstsource Solutions will grow in line with the overall 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 forecasts for Firstsource Solutions going out to 2027, 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 2 warning signs with Firstsource Solutions , and understanding them should be part of your investment process.

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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.

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