Nazara Technologies Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

The yearly results for Nazara Technologies Limited (NSE:NAZARA) were released last week, making it a good time to revisit its performance. Results overall were not great, with earnings of ₹6.27 per share falling drastically short of analyst expectations. Meanwhile revenues hit ₹11b and were slightly better than forecasts. 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 Nazara Technologies

Taking into account the latest results, the consensus forecast from Nazara Technologies' nine analysts is for revenues of ₹14.2b in 2024, which would reflect a sizeable 25% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 51% to ₹9.43. Before this earnings report, the analysts had been forecasting revenues of ₹14.5b and earnings per share (EPS) of ₹10.97 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

It might be a surprise to learn that the consensus price target fell 6.5% to ₹736, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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. The most optimistic Nazara Technologies analyst has a price target of ₹1,015 per share, while the most pessimistic values it at ₹515. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. It's pretty clear that there is an expectation that Nazara Technologies' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 25% growth on an annualised basis. This is compared to a historical growth rate of 43% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% annually. So it's pretty clear that, while Nazara Technologies' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Nazara Technologies. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Nazara Technologies. Long-term earnings power is much more important than next year's profits. We have forecasts for Nazara Technologies going out to 2026, 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.