TeamLease Services Limited Just Missed EPS By 16%: Here's What Analysts Think Will Happen Next

It's been a good week for TeamLease Services Limited (NSE:TEAMLEASE) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.3% to ₹2,851. Statutory earnings per share of ₹13.38 unfortunately missed expectations by 16%, although it was encouraging to see revenues of ₹13b exceed expectations by 5.5%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for TeamLease Services

Taking into account the latest results, the current consensus from TeamLease Services' ten analysts is for revenues of ₹56.2b in 2022, which would reflect a decent 15% increase on its sales over the past 12 months. Per-share earnings are expected to leap 314% to ₹70.54. In the lead-up to this report, the analysts had been modelling revenues of ₹56.6b and earnings per share (EPS) of ₹69.99 in 2022. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 8.1% to ₹2,734despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of TeamLease Services' earnings by assigning a price premium. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on TeamLease Services, with the most bullish analyst valuing it at ₹4,001 and the most bearish at ₹1,580 per share. 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 TeamLease Services'historical trends, as next year's 15% revenue growth is roughly in line with 16% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So although TeamLease Services is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than 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 estimates - from multiple TeamLease Services analysts - going out to 2023, and you can see them free on our platform here.

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

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