Earnings Miss: Zomato Limited Missed EPS By 35% And Analysts Are Revising Their Forecasts

Zomato Limited (NSE:ZOMATO) shareholders are probably feeling a little disappointed, since its shares fell 6.0% to ₹254 in the week after its latest second-quarter results. It looks like a pretty bad result, all things considered. Although revenues of ₹48b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 35% to hit ₹0.20 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.

View our latest analysis for Zomato

Taking into account the latest results, the most recent consensus for Zomato from 25 analysts is for revenues of ₹197.7b in 2025. If met, it would imply a sizeable 25% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 23% to ₹1.05. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹191.5b and earnings per share (EPS) of ₹1.38 in 2025. While next year's revenue estimates increased, there was also a pretty serious reduction to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

There's been no major changes to the price target of ₹293, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. 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. Currently, the most bullish analyst values Zomato at ₹370 per share, while the most bearish prices it at ₹100.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Zomato'shistorical trends, as the 55% annualised revenue growth to the end of 2025 is roughly in line with the 51% annual growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 20% annually. So it's pretty clear that Zomato is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Zomato. Happily, they also upgraded their revenue estimates, and are forecasting them 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Zomato going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Zomato that you need to be mindful 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.