Analysts Just Slashed Their Prataap Snacks Limited (NSE:DIAMONDYD) EPS Numbers

One thing we could say about the analysts on Prataap Snacks Limited (NSE:DIAMONDYD) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the current consensus from Prataap Snacks' three analysts is for revenues of ₹13b in 2022 which - if met - would reflect a notable 14% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to decline 13% to ₹5.29 in the same period. Prior to this update, the analysts had been forecasting revenues of ₹16b and earnings per share (EPS) of ₹20.70 in 2022. Indeed, we can see that the analysts are a lot more bearish about Prataap Snacks' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Prataap Snacks

It'll come as no surprise then, to learn that the analysts have cut their price target 7.8% to ₹812. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Prataap Snacks, with the most bullish analyst valuing it at ₹862 and the most bearish at ₹732 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

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. It's clear from the latest estimates that Prataap Snacks' rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 9.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.6% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Prataap Snacks to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Prataap Snacks. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Prataap Snacks.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Prataap Snacks going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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