Analysts Have Been Trimming Their CarTrade Tech Limited (NSE:CARTRADE) Price Target After Its Latest Report

As you might know, CarTrade Tech Limited (NSE:CARTRADE) recently reported its full-year numbers. CarTrade Tech reported revenues of ₹3.1b, in line with expectations, but it unfortunately also reported (statutory) losses of ₹28.72 per share, which were slightly larger than expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for CarTrade Tech

Taking into account the latest results, the most recent consensus for CarTrade Tech from five analysts is for revenues of ₹4.04b in 2023 which, if met, would be a sizeable 29% increase on its sales over the past 12 months. Earnings are expected to improve, with CarTrade Tech forecast to report a statutory profit of ₹6.40 per share. Before this earnings report, the analysts had been forecasting revenues of ₹4.20b and earnings per share (EPS) of ₹9.46 in 2023. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 17% to ₹857. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on CarTrade Tech, with the most bullish analyst valuing it at ₹1,142 and the most bearish at ₹651 per share. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting CarTrade Tech's growth to accelerate, with the forecast 29% annualised growth to the end of 2023 ranking favourably alongside historical growth of 18% per annum 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 23% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that CarTrade Tech is expected to grow much 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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of CarTrade Tech's future valuation.

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 CarTrade Tech going out to 2025, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for CarTrade Tech you should know about.

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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.