One97 Communications Limited (NSE:PAYTM) Just Reported And Analysts Have Been Lifting Their Price Targets

Investors in One97 Communications Limited (NSE:PAYTM) had a good week, as its shares rose 9.8% to close at ₹764 following the release of its second-quarter results. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for One97 Communications

Following the recent earnings report, the consensus from 16 analysts covering One97 Communications is for revenues of ₹74.1b in 2025. This implies a considerable 11% decline in revenue compared to the last 12 months. Losses are forecast to balloon 138% to ₹25.41 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of ₹75.8b and losses of ₹35.45 per share in 2025. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a considerable decrease in losses per share in particular.

There was a decent 24% increase in the price target to ₹598, with the analysts clearly signalling that the expected reduction in losses is a positive, despite a weaker revenue outlook. 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 One97 Communications at ₹960 per share, while the most bearish prices it at ₹325. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the One97 Communications' past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 20% by the end of 2025. This indicates a significant reduction from annual growth of 28% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.2% per year. It's pretty clear that One97 Communications' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. With that said, earnings are more important to the long-term value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for One97 Communications going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for One97 Communications that we have uncovered.

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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.