Earnings Miss: FSN E-Commerce Ventures Limited Missed EPS By 37% And Analysts Are Revising Their Forecasts

Last week, you might have seen that FSN E-Commerce Ventures Limited (NSE:NYKAA) released its full-year result to the market. The early response was not positive, with shares down 3.9% to ₹1,401 in the past week. It looks like a pretty bad result, all things considered. Although revenues of ₹38b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 37% to hit ₹0.87 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for FSN E-Commerce Ventures

Taking into account the latest results, the current consensus from FSN E-Commerce Ventures' 15 analysts is for revenues of ₹55.6b in 2023, which would reflect a major 47% increase on its sales over the past 12 months. Per-share earnings are expected to jump 467% to ₹4.91. Before this earnings report, the analysts had been forecasting revenues of ₹55.6b and earnings per share (EPS) of ₹5.42 in 2023. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The average price target fell 6.2% to ₹1,851, with reduced earnings forecasts clearly tied to a lower valuation estimate. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values FSN E-Commerce Ventures at ₹2,750 per share, while the most bearish prices it at ₹1,250. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes 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 FSN E-Commerce Ventures' growth to accelerate, with the forecast 47% annualised growth to the end of 2023 ranking favourably alongside historical growth of 33% per annum over the past three 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 FSN E-Commerce Ventures 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. Happily, there were no major changes to revenue forecasts, with the business still expected to 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 FSN E-Commerce Ventures' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on FSN E-Commerce Ventures. Long-term earnings power is much more important than next year's profits. We have forecasts for FSN E-Commerce Ventures going out to 2025, and you can see them free on our platform here.

Plus, you should also learn about the 4 warning signs we've spotted with FSN E-Commerce Ventures (including 1 which is a bit unpleasant) .

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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.