Newgen Software Technologies Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Last week saw the newest quarterly earnings release from Newgen Software Technologies Limited (NSE:NEWGEN), an important milestone in the company's journey to build a stronger business. It looks like a credible result overall - although revenues of ₹3.1b were what the analysts expected, Newgen Software Technologies surprised by delivering a (statutory) profit of ₹3.30 per share, an impressive 26% above what was forecast. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Newgen Software Technologies

Following the latest results, Newgen Software Technologies' three analysts are now forecasting revenues of ₹15.7b in 2025. This would be a huge 20% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 20% to ₹23.03. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹15.7b and earnings per share (EPS) of ₹23.50 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 7.2% to ₹1,101. It looks as though they previously had some doubts over whether the business would live up to their expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Newgen Software Technologies analyst has a price target of ₹1,220 per share, while the most pessimistic values it at ₹1,010. This is a very narrow spread of estimates, implying either that Newgen Software Technologies is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Newgen Software Technologies' growth to accelerate, with the forecast 28% annualised growth to the end of 2025 ranking favourably alongside historical growth of 15% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Newgen Software Technologies is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Newgen Software Technologies analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Newgen Software Technologies .

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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.

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