Rainbow Children's Medicare Limited (NSE:RAINBOW) Just Reported Full-Year Earnings: Have Analysts Changed Their Mind On The Stock?

It's been a good week for Rainbow Children's Medicare Limited (NSE:RAINBOW) shareholders, because the company has just released its latest yearly results, and the shares gained 4.0% to ₹1,401. It looks like the results were a bit of a negative overall. While revenues of ₹15b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.4% to hit ₹23.84 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the consensus forecast from Rainbow Children's Medicare's ten analysts is for revenues of ₹18.0b in 2026. This reflects a notable 19% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 26% to ₹30.28. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹18.2b and earnings per share (EPS) of ₹31.38 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

Check out our latest analysis for Rainbow Children's Medicare

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹1,609, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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. There are some variant perceptions on Rainbow Children's Medicare, with the most bullish analyst valuing it at ₹1,725 and the most bearish at ₹1,474 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to 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 19% annualised revenue growth to the end of 2026 is roughly in line with the 17% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 17% per year. 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 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

Following on from that line of thought, we think that 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 Rainbow Children's Medicare going out to 2028, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.