Earnings Miss: NIIT Learning Systems Limited Missed EPS By 12% And Analysts Are Revising Their Forecasts

Explore NIIT Learning Systems's Fair Values from the Community and select yours

Investors in NIIT Learning Systems Limited (NSE:NIITMTS) had a good week, as its shares rose 3.2% to close at ₹325 following the release of its first-quarter results. Statutory earnings per share of ₹3.51 unfortunately missed expectations by 12%, although it was encouraging to see revenues of ₹4.5b exceed expectations by 2.4%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

After the latest results, the three analysts covering NIIT Learning Systems are now predicting revenues of ₹18.8b in 2026. If met, this would reflect a meaningful 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 11% to ₹17.60. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹18.4b and earnings per share (EPS) of ₹18.55 in 2026. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a meaningful to revenue, the consensus also made a minor downgrade to its earnings per share forecasts.

Check out our latest analysis for NIIT Learning Systems

There's been no major changes to the price target of ₹453, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic NIIT Learning Systems analyst has a price target of ₹475 per share, while the most pessimistic values it at ₹435. This is a very narrow spread of estimates, implying either that NIIT Learning Systems is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting NIIT Learning Systems' growth to accelerate, with the forecast 14% annualised growth to the end of 2026 ranking favourably alongside historical growth of 7.8% per annum over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.6% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect NIIT Learning Systems 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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at ₹453, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on NIIT Learning Systems. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple NIIT Learning Systems analysts - going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for NIIT Learning Systems that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.