CARE Ratings Limited (NSE:CARERATING) Just Released Its Third-Quarter Earnings: Here's What Analysts Think

CARE Ratings Limited (NSE:CARERATING) shareholders are probably feeling a little disappointed, since its shares fell 5.8% to ₹571 in the week after its latest third-quarter results. Revenues came in 3.5% below expectations, at ₹562m. Statutory earnings per share were relatively better off, with a per-share profit of ₹30.33 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 CARE Ratings

Following the latest results, CARE Ratings' twin analysts are now forecasting revenues of ₹2.97b in 2023. This would be a solid 14% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to bounce 23% to ₹32.40. Before this earnings report, the analysts had been forecasting revenues of ₹3.04b and earnings per share (EPS) of ₹34.05 in 2023. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The analysts made no major changes to their price target of ₹734, suggesting the downgrades are not expected to have a long-term impact on CARE Ratings' valuation.

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. For example, we noticed that CARE Ratings' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 11% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 7.4% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 13% annually. So it looks like CARE Ratings is expected to grow at about the same rate as 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. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at ₹734, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for CARE Ratings going out as far as 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for CARE Ratings you should know about.

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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.