Need To Know: This Analyst Just Made A Substantial Cut To Their Infibeam Avenues Limited (NSE:INFIBEAM) Estimates

The latest analyst coverage could presage a bad day for Infibeam Avenues Limited (NSE:INFIBEAM), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following the downgrade, the latest consensus from Infibeam Avenues' one analyst is for revenues of ₹17b in 2023, which would reflect a substantial 32% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 20% to ₹0.39. Before this latest update, the analyst had been forecasting revenues of ₹21b and earnings per share (EPS) of ₹0.58 in 2023. Indeed, we can see that the analyst is a lot more bearish about Infibeam Avenues' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Infibeam Avenues

It'll come as no surprise then, to learn that the analyst has cut their price target 35% to ₹28.00.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Infibeam Avenues' past performance and to peers in the same industry. It's clear from the latest estimates that Infibeam Avenues' rate of growth is expected to accelerate meaningfully, with the forecast 32% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 6.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Infibeam Avenues is expected to grow much faster than its industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Infibeam Avenues. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.