Rainbows and Unicorns: Dixon Technologies (India) Limited (NSE:DIXON) Analysts Just Became A Lot More Optimistic

Celebrations may be in order for Dixon Technologies (India) Limited (NSE:DIXON) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market may be pricing in some blue sky too, with the share price gaining 15% to ₹16,310 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the current consensus from Dixon Technologies (India)'s 14 analysts is for revenues of ₹109b in 2022 which - if met - would reflect a substantial 110% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 114% to ₹265. Previously, the analysts had been modelling revenues of ₹93b and earnings per share (EPS) of ₹226 in 2022. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for Dixon Technologies (India)

With these upgrades, we're not surprised to see that the analysts have lifted their price target 41% to ₹16,438 per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Dixon Technologies (India) at ₹19,584 per share, while the most bearish prices it at ₹10,003. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. It's clear from the latest estimates that Dixon Technologies (India)'s rate of growth is expected to accelerate meaningfully, with the forecast 110% revenue growth noticeably faster than its historical growth of 20% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Dixon Technologies (India) is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for next year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Dixon Technologies (India) could be worth investigating further.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Dixon Technologies (India) 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. 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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