Ethos Limited Just Missed Earnings - But Analysts Have Updated Their Models

Investors in Ethos Limited (NSE:ETHOSLTD) had a good week, as its shares rose 4.2% to close at ₹2,445 following the release of its second-quarter results. Results overall were not great, with earnings of ₹8.68 per share falling drastically short of analyst expectations. Meanwhile revenues hit ₹3.0b and were slightly better than forecasts. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Ethos

Taking into account the latest results, the current consensus from Ethos' twin analysts is for revenues of ₹12.5b in 2025. This would reflect an okay 4.7% increase on its revenue over the past 12 months. Per-share earnings are expected to increase 6.4% to ₹41.10. In the lead-up to this report, the analysts had been modelling revenues of ₹12.4b and earnings per share (EPS) of ₹40.15 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of ₹3,300, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation.

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. It's pretty clear that there is an expectation that Ethos' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 9.7% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 21% annually. Factoring in the forecast slowdown in growth, it seems obvious that Ethos is also expected to grow slower than other industry participants.

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 Ethos following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Ethos' revenue is expected to perform worse than the wider industry. The consensus price target held steady at ₹3,300, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Ethos. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.