Earnings Miss: Ethos Limited Missed EPS By 11% And Analysts Are Revising Their Forecasts

Ethos Limited (NSE:ETHOSLTD) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at ₹2.8b, statutory earnings missed forecasts by 11%, coming in at just ₹10.84 per share. 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.

View our latest analysis for Ethos

After the latest results, the dual analysts covering Ethos are now predicting revenues of ₹12.8b in 2025. If met, this would reflect a sizeable 34% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 47% to ₹45.25. In the lead-up to this report, the analysts had been modelling revenues of ₹12.8b and earnings per share (EPS) of ₹47.05 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 31% to ₹2,850, suggesting the revised estimates are not indicative of a weaker long-term future for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Ethos' growth to accelerate, with the forecast 27% annualised growth to the end of 2025 ranking favourably alongside historical growth of 17% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 22% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Ethos is expected to grow at about the same rate as the wider 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Ethos going out as far as 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Ethos has 2 warning signs we think 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.