The latest analyst coverage could presage a bad day for Entertainment Network (India) Limited (NSE:ENIL), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following the downgrade, the most recent consensus for Entertainment Network (India) from its three analysts is for revenues of ₹3.4b in 2022 which, if met, would be a major 25% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 71% to ₹6.20. Yet before this consensus update, the analysts had been forecasting revenues of ₹3.9b and losses of ₹1.97 per share in 2022. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Entertainment Network (India) is forecast to grow faster in the future than it has in the past, with revenues expected to display 34% annualised growth until the end of 2022. If achieved, this would be a much better result than the 7.5% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 14% per year. So it looks like Entertainment Network (India) is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Entertainment Network (India), and we wouldn't blame shareholders for feeling a little more cautious themselves.
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 Entertainment Network (India) going out to 2023, 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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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.
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