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

Avalon Technologies Limited (NSE:AVALON) just released its second-quarter report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 7.6% to hit ₹3.8b. Avalon Technologies reported statutory earnings per share (EPS) ₹3.73, which was a notable 12% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are 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 analysts have changed their earnings models, following these results.

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After the latest results, the 15 analysts covering Avalon Technologies are now predicting revenues of ₹14.9b in 2026. If met, this would reflect a solid 12% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 8.0% to ₹14.16. Before this earnings report, the analysts had been forecasting revenues of ₹14.4b and earnings per share (EPS) of ₹14.17 in 2026. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small lift in to revenue forecasts.

See our latest analysis for Avalon Technologies

It may not be a surprise to see thatthe analysts have reconfirmed their price target of ₹963, implying that the uplift in revenue is not expected to greatly contribute to Avalon Technologies's valuation in the near term. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Avalon Technologies analyst has a price target of ₹1,250 per share, while the most pessimistic values it at ₹515. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Avalon Technologies' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 25% growth on an annualised basis. This is compared to a historical growth rate of 47% over the past year. Compare this to the 71 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 21% per year. Factoring in the forecast slowdown in growth, it looks like Avalon Technologies is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at ₹963, with the latest estimates not enough to have an impact on their price targets.

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. We have estimates - from multiple Avalon Technologies analysts - going out to 2028, and you can see them free on our platform here.

You still need to take note of risks, for example - Avalon Technologies has 2 warning signs (and 1 which can't be ignored) we think you should know about.

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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.