Lemon Tree Hotels Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's been a mediocre week for Lemon Tree Hotels Limited (NSE:LEMONTREE) shareholders, with the stock dropping 18% to ₹120 in the week since its latest first-quarter results. It looks like a pretty bad result, all things considered. Although revenues of ₹2.7b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 32% to hit ₹0.25 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Lemon Tree Hotels

Taking into account the latest results, the consensus forecast from Lemon Tree Hotels' 14 analysts is for revenues of ₹13.6b in 2025. This reflects a huge 21% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 51% to ₹2.77. In the lead-up to this report, the analysts had been modelling revenues of ₹13.8b and earnings per share (EPS) of ₹3.16 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

The consensus price target held steady at ₹155, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. The most optimistic Lemon Tree Hotels analyst has a price target of ₹180 per share, while the most pessimistic values it at ₹115. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 Lemon Tree Hotels' rate of growth is expected to accelerate meaningfully, with the forecast 29% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 18% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 19% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Lemon Tree Hotels to grow faster than the wider industry.

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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Lemon Tree Hotels going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Lemon Tree Hotels that 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.