Dixon Technologies (India) Limited (NSE:DIXON) Analysts Just Cut Their EPS Forecasts Substantially

The analysts covering Dixon Technologies (India) Limited (NSE:DIXON) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the 20 analysts covering Dixon Technologies (India) are now predicting revenues of ₹183b in 2024. If met, this would reflect a huge 51% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 83% to ₹73.02. Prior to this update, the analysts had been forecasting revenues of ₹208b and earnings per share (EPS) of ₹83.02 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a real cut to earnings per share numbers as well.

Check out our latest analysis for Dixon Technologies (India)

The consensus price target fell 10% to ₹3,854, with the weaker earnings outlook clearly leading analyst valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Dixon Technologies (India), with the most bullish analyst valuing it at ₹4,840 and the most bearish at ₹2,388 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

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. We can infer from the latest estimates that forecasts expect a continuation of Dixon Technologies (India)'shistorical trends, as the 39% annualised revenue growth to the end of 2024 is roughly in line with the 35% 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 15% per year. So although Dixon Technologies (India) is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Dixon Technologies (India). While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Dixon Technologies (India).

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Dixon Technologies (India) analysts - going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.