Results: RateGain Travel Technologies Limited Exceeded Expectations And The Consensus Has Updated Its Estimates

As you might know, RateGain Travel Technologies Limited (NSE:RATEGAIN) recently reported its quarterly numbers. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at ₹1.2b, statutory earnings beat expectations by a notable 33%, coming in at ₹1.20 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.

Our analysis indicates that RATEGAIN is potentially overvalued!

After the latest results, the twin analysts covering RateGain Travel Technologies are now predicting revenues of ₹5.21b in 2023. If met, this would reflect a notable 15% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to soar 60% to ₹4.90. In the lead-up to this report, the analysts had been modelling revenues of ₹5.32b and earnings per share (EPS) of ₹4.55 in 2023. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

The consensus price target fell 11% to ₹403, with the analysts signalling that the weaker revenue outlook was a more powerful indicator than the upgraded EPS forecasts.

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. We would highlight that RateGain Travel Technologies' revenue growth is expected to slow, with the forecast 32% annualised growth rate until the end of 2023 being well below the historical 47% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 16% per year. Even after the forecast slowdown in growth, it seems obvious that RateGain Travel Technologies is also expected to grow faster than the wider industry.

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 RateGain Travel Technologies following these results. They also downgraded their revenue estimates, although industry data suggests that RateGain Travel Technologies' revenues are expected to grow faster than the wider industry. Even so, long term profitability is more important for the value creation process. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that 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 2025, which can be seen for free on our platform here.

We also provide an overview of the RateGain Travel Technologies Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.