Eris Lifesciences Limited Just Missed EPS By 8.6%: Here's What Analysts Think Will Happen Next

It's been a good week for Eris Lifesciences Limited (NSE:ERIS) shareholders, because the company has just released its latest second-quarter results, and the shares gained 2.3% to ₹1,303. It looks like the results were a bit of a negative overall. While revenues of ₹7.4b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 8.6% to hit ₹6.72 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Eris Lifesciences

Taking into account the latest results, the consensus forecast from Eris Lifesciences' nine analysts is for revenues of ₹30.1b in 2025. This reflects a major 21% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 9.0% to ₹27.90. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹30.3b and earnings per share (EPS) of ₹28.60 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 9.9% to ₹1,484, suggesting the revised estimates are not indicative of a weaker long-term future for the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Eris Lifesciences at ₹1,680 per share, while the most bearish prices it at ₹1,230. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Eris Lifesciences shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Eris Lifesciences' rate of growth is expected to accelerate meaningfully, with the forecast 46% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 17% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Eris Lifesciences is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Eris Lifesciences. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Eris Lifesciences. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Eris Lifesciences analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Eris Lifesciences that 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.