Earnings Update: Here's Why Analysts Just Lifted Their Quess Corp Limited (NSE:QUESS) Price Target To ₹657

It's been a good week for Quess Corp Limited (NSE:QUESS) shareholders, because the company has just released its latest first-quarter results, and the shares gained 4.2% to ₹715. It was a credible result overall, with revenues of ₹50b and statutory earnings per share of ₹18.61 both in line with analyst estimates, showing that Quess is executing in line with expectations. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Quess

After the latest results, the five analysts covering Quess are now predicting revenues of ₹216.2b in 2025. If met, this would reflect a decent 11% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be ₹22.47, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of ₹216.2b and earnings per share (EPS) of ₹37.30 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 7.9% to ₹657, suggesting the revised estimates are not indicative of a weaker long-term future for the business. 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. Currently, the most bullish analyst values Quess at ₹860 per share, while the most bearish prices it at ₹460. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We can infer from the latest estimates that forecasts expect a continuation of Quess'historical trends, as the 15% annualised revenue growth to the end of 2025 is roughly in line with the 16% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 14% per year. It's clear that while Quess' revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

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. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 Quess going out to 2027, and you can see them free on our platform here.

Even so, be aware that Quess is showing 2 warning signs in our investment analysis , you should know about...

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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.

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