Avanti Feeds Limited Just Recorded A 17% EPS Beat: Here's What Analysts Are Forecasting Next

Avanti Feeds Limited (NSE:AVANTIFEED) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at ₹9.2b, statutory earnings beat expectations by a notable 17%, coming in at ₹5.50 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Avanti Feeds after the latest results.

Check out our latest analysis for Avanti Feeds

Following the latest results, Avanti Feeds' three analysts are now forecasting revenues of ₹47.5b in 2022. This would be a decent 18% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to accumulate 9.5% to ₹30.33. Before this earnings report, the analysts had been forecasting revenues of ₹48.6b and earnings per share (EPS) of ₹32.07 in 2022. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of ₹636, suggesting the downgrades are not expected to have a long-term impact on Avanti Feeds' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Avanti Feeds at ₹782 per share, while the most bearish prices it at ₹559. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Avanti Feeds' growth to accelerate, with the forecast 18% growth ranking favourably alongside historical growth of 14% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.4% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Avanti Feeds 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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 Avanti Feeds going out to 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Avanti Feeds that you should be aware of.

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