Stock Analysis

Here's What Analysts Are Forecasting For Five-Star Business Finance Limited (NSE:FIVESTAR) After Its Annual Results

NSEI:FIVESTAR
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Investors in Five-Star Business Finance Limited (NSE:FIVESTAR) had a good week, as its shares rose 4.5% to close at ₹542 following the release of its annual results. Results were roughly in line with estimates, with revenues of ₹12b and statutory earnings per share of ₹20.49. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Five-Star Business Finance after the latest results.

See our latest analysis for Five-Star Business Finance

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NSEI:FIVESTAR Earnings and Revenue Growth May 13th 2023

Taking into account the latest results, the consensus forecast from Five-Star Business Finance's two analysts is for revenues of ₹15.5b in 2024, which would reflect a sizeable 25% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 21% to ₹25.15. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹15.3b and earnings per share (EPS) of ₹24.45 in 2024. So the consensus seems to have become somewhat more optimistic on Five-Star Business Finance's earnings potential following these results.

The consensus price target was unchanged at ₹710, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 25% growth on an annualised basis. That is in line with its 30% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 22% per year. It's clear that while Five-Star Business Finance's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Five-Star Business Finance's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

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. We have analyst estimates for Five-Star Business Finance going out as far as 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Five-Star Business Finance you should know about.

Valuation is complex, but we're helping make it simple.

Find out whether Five-Star Business Finance is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.