Eris Lifesciences Limited (NSE:ERIS) Analysts Are Pretty Bullish On The Stock After Recent Results

Eris Lifesciences Limited (NSE:ERIS) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results overall were respectable, with statutory earnings of ₹21.58 per share roughly in line with what the analysts had forecast. Revenues of ₹3.1b came in 2.5% ahead of analyst predictions. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Eris Lifesciences

After the latest results, the seven analysts covering Eris Lifesciences are now predicting revenues of ₹13.3b in 2022. If met, this would reflect a notable 14% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to climb 12% to ₹28.38. Before this earnings report, the analysts had been forecasting revenues of ₹13.4b and earnings per share (EPS) of ₹27.81 in 2022. So the consensus seems to have become somewhat more optimistic on Eris Lifesciences' earnings potential following these results.

The consensus price target rose 5.7% to ₹706, suggesting that higher earnings estimates flow through to the stock's valuation as well. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Eris Lifesciences analyst has a price target of ₹841 per share, while the most pessimistic values it at ₹566. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. Next year brings more of the same, according to the analysts, with revenue forecast to grow 14%, in line with its 12% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 11% next year. So although Eris Lifesciences is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Eris Lifesciences following these results. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Eris Lifesciences analysts - going out to 2023, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Eris Lifesciences that you need to take into consideration.

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