Earnings Miss: Trident Limited Missed EPS By 13% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Trident Limited (NSE:TRIDENT) filed its annual result this time last week. The early response was not positive, with shares down 4.0% to ₹16.80 in the past week. It was not a great result overall. While revenues of ₹45b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 13% to hit ₹0.61 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Trident

Taking into account the latest results, the current consensus from Trident's two analysts is for revenues of ₹54.4b in 2022, which would reflect a major 20% increase on its sales over the past 12 months. Statutory earnings per share are predicted to soar 31% to ₹0.80. In the lead-up to this report, the analysts had been modelling revenues of ₹55.6b and earnings per share (EPS) of ₹0.70 in 2022. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the substantial gain in to the earnings per share numbers.

The average price target increased 13% to ₹15.55, with the analysts signalling that the improved earnings outlook is more important to the company's valuation than its revenue.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Trident's rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 1.1% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 19% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Trident is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Trident following these results. Sadly, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Still, earnings are more important to the intrinsic value of the business. 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. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Trident you should be aware of.

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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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