Stock Analysis

Laurus Labs Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

NSEI:LAURUSLABS
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Laurus Labs Limited (NSE:LAURUSLABS) just released its latest third-quarter report and things are not looking great. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of ₹12b missed by 12%, and statutory earnings per share of ₹0.43 fell short of forecasts by 79%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Laurus Labs

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NSEI:LAURUSLABS Earnings and Revenue Growth January 27th 2024

Taking into account the latest results, the most recent consensus for Laurus Labs from 13 analysts is for revenues of ₹60.2b in 2025. If met, it would imply a substantial 21% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 176% to ₹9.63. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹63.5b and earnings per share (EPS) of ₹12.91 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the ₹370 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Laurus Labs analyst has a price target of ₹460 per share, while the most pessimistic values it at ₹250. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Laurus Labs' past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Laurus Labs'historical trends, as the 16% annualised revenue growth to the end of 2025 is roughly in line with the 19% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 10% per year. So it's pretty clear that Laurus Labs is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Laurus Labs going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Laurus Labs has 3 warning signs we think you should be aware of.

Valuation is complex, but we're helping make it simple.

Find out whether Laurus Labs is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.