Stock Analysis

₹7,900 - That's What Analysts Think Oracle Financial Services Software Limited (NSE:OFSS) Is Worth After These Results

NSEI:OFSS
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Oracle Financial Services Software Limited (NSE:OFSS) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasts think of the company following this report. It looks like the results were a bit of a negative overall. While revenues of ₹64b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.2% to hit ₹255 per share. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.

See our latest analysis for Oracle Financial Services Software

earnings-and-revenue-growth
NSEI:OFSS Earnings and Revenue Growth April 27th 2024

Following the latest results, Oracle Financial Services Software's solitary analyst are now forecasting revenues of ₹70.6b in 2025. This would be a solid 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 10% to ₹283. Before this earnings report, the analyst had been forecasting revenues of ₹72.5b and earnings per share (EPS) of ₹286 in 2025. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The consensus price target rose 24% to ₹7,900, with the analyst apparently satisfied with the business performance despite lower revenue forecasts.

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 analyst is definitely expecting Oracle Financial Services Software's growth to accelerate, with the forecast 11% annualised growth to the end of 2025 ranking favourably alongside historical growth of 4.9% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. So it's clear that despite the acceleration in growth, Oracle Financial Services Software is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analyst reconfirming that the business is performing in line with their previous earnings per share estimates. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings per share are more important to value creation for shareholders. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for Oracle Financial Services Software going out as far as 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Oracle Financial Services Software (2 are concerning!) that you need to be mindful 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.