Earnings Miss: Campus Activewear Limited Missed EPS By 14% And Analysts Are Revising Their Forecasts

As you might know, Campus Activewear Limited (NSE:CAMPUS) last week released its latest annual, and things did not turn out so great for shareholders. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at ₹15b, statutory earnings missed forecasts by 14%, coming in at just ₹3.84 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Campus Activewear

Taking into account the latest results, the current consensus from Campus Activewear's five analysts is for revenues of ₹17.5b in 2024, which would reflect a meaningful 18% increase on its sales over the past 12 months. Per-share earnings are expected to surge 44% to ₹5.54. Before this earnings report, the analysts had been forecasting revenues of ₹18.4b and earnings per share (EPS) of ₹6.38 in 2024. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a real cut to earnings per share numbers.

The consensus price target fell 12% to ₹380, with the weaker earnings outlook clearly leading valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Campus Activewear, with the most bullish analyst valuing it at ₹495 and the most bearish at ₹307 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Campus Activewear's revenue growth is expected to slow, with the forecast 18% annualised growth rate until the end of 2024 being well below the historical 29% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% per year. So it's pretty clear that, while Campus Activewear's revenue growth is expected to slow, it's still expected to grow faster than 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Campus Activewear's future valuation.

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 Campus Activewear analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Campus Activewear you should be aware of.

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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.