Earnings Beat: Rainbow Children's Medicare Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Rainbow Children's Medicare Limited (NSE:RAINBOW) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 3.8% to hit ₹4.2b. Rainbow Children's Medicare also reported a statutory profit of ₹7.77, which was an impressive 34% above what the analysts had forecast. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Rainbow Children's Medicare

After the latest results, the nine analysts covering Rainbow Children's Medicare are now predicting revenues of ₹15.5b in 2025. If met, this would reflect a meaningful 8.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 12% to ₹25.49. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹15.5b and earnings per share (EPS) of ₹23.78 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 12% to ₹1,544. 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. There are some variant perceptions on Rainbow Children's Medicare, with the most bullish analyst valuing it at ₹1,700 and the most bearish at ₹1,240 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Rainbow Children's Medicare is an easy business to forecast or the the analysts are all using similar assumptions.

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. We can infer from the latest estimates that forecasts expect a continuation of Rainbow Children's Medicare'shistorical trends, as the 18% annualised revenue growth to the end of 2025 is roughly in line with the 16% annual growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 18% annually. It's clear that while Rainbow Children's Medicare'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 most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Rainbow Children's Medicare following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. 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 in mind, we wouldn't be too quick to come to a conclusion on Rainbow Children's Medicare. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Rainbow Children's Medicare 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 Rainbow Children's Medicare 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.