Results: Navneet Education Limited Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a good week for Navneet Education Limited (NSE:NAVNETEDUL) shareholders, because the company has just released its latest annual results, and the shares gained 2.8% to ₹91.60. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at ₹10b, statutory earnings beat expectations by a notable 60%, coming in at ₹5.77 per share. The analyst 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 analyst latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Navneet Education

Taking into account the latest results, the current consensus from Navneet Education's one analyst is for revenues of ₹16.4b in 2023, which would reflect a substantial 63% increase on its sales over the past 12 months. Per-share earnings are expected to jump 75% to ₹8.40. Before this earnings report, the analyst had been forecasting revenues of ₹16.4b and earnings per share (EPS) of ₹10.00 in 2023. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

The consensus price target held steady at ₹123, with the analyst seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future.

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. One thing stands out from these estimates, which is that Navneet Education is forecast to grow faster in the future than it has in the past, with revenues expected to display 63% annualised growth until the end of 2023. If achieved, this would be a much better result than the 9.9% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 13% annually. So it looks like Navneet Education 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 the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at ₹123, with the latest estimates not enough to have an impact on their price target.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Navneet Education going out as far as 2024, 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 Navneet Education 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.