Stock Analysis

Analysts Are Updating Their Dr. Lal PathLabs Limited (NSE:LALPATHLAB) Estimates After Its Second-Quarter Results

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NSEI:LALPATHLAB

Dr. Lal PathLabs Limited (NSE:LALPATHLAB) shareholders are probably feeling a little disappointed, since its shares fell 6.5% to ₹3,138 in the week after its latest quarterly results. The result was positive overall - although revenues of ₹6.6b were in line with what the analysts predicted, Dr. Lal PathLabs surprised by delivering a statutory profit of ₹15.48 per share, modestly greater than expected. 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 Dr. Lal PathLabs after the latest results.

Check out our latest analysis for Dr. Lal PathLabs

NSEI:LALPATHLAB Earnings and Revenue Growth October 26th 2024

Following the latest results, Dr. Lal PathLabs' 22 analysts are now forecasting revenues of ₹24.8b in 2025. This would be a satisfactory 5.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 8.4% to ₹52.22. In the lead-up to this report, the analysts had been modelling revenues of ₹25.0b and earnings per share (EPS) of ₹51.49 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of ₹3,210, showing that the business is executing well and in line with expectations. 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 Dr. Lal PathLabs, with the most bullish analyst valuing it at ₹3,770 and the most bearish at ₹2,286 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Dr. Lal PathLabs shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Dr. Lal PathLabs'historical trends, as the 12% annualised revenue growth to the end of 2025 is roughly in line with the 12% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 18% annually. So it's pretty clear that Dr. Lal PathLabs is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Dr. Lal PathLabs' revenue is expected to perform worse 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Dr. Lal PathLabs going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Dr. Lal PathLabs you should be aware of.

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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.