These Analysts Think Astra Microwave Products Limited's (NSE:ASTRAMICRO) Sales Are Under Threat

Market forces rained on the parade of Astra Microwave Products Limited (NSE:ASTRAMICRO) shareholders today, when the analysts downgraded their forecasts for next year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After the downgrade, the twin analysts covering Astra Microwave Products are now predicting revenues of ₹11b in 2025. If met, this would reflect a major 30% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 68% to ₹14.20. Before this latest update, the analysts had been forecasting revenues of ₹12b and earnings per share (EPS) of ₹15.15 in 2025. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a minor downgrade to earnings per share numbers as well.

Check out our latest analysis for Astra Microwave Products

What's most unexpected is that the consensus price target rose 9.5% to ₹640, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

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 Astra Microwave Products' growth to accelerate, with the forecast 24% annualised growth to the end of 2025 ranking favourably alongside historical growth of 19% per annum over the past five 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 Astra Microwave Products is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Astra Microwave Products. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given the stark change in sentiment, we'd understand if investors became more cautious on Astra Microwave Products after today.

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 2026, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.