Genpact Limited Just Recorded A 9.6% EPS Beat: Here's What Analysts Are Forecasting Next

Genpact Limited (NYSE:G) investors will be delighted, with the company turning in some strong numbers with its latest results. Results were good overall, with revenues beating analyst predictions by 2.6% to hit US$1.2b. Statutory earnings per share (EPS) came in at US$0.67, some 9.6% above whatthe analysts had expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Genpact

Following last week's earnings report, Genpact's twelve analysts are forecasting 2024 revenues to be US$4.66b, approximately in line with the last 12 months. Statutory earnings per share are expected to crater 26% to US$2.68 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$4.62b and earnings per share (EPS) of US$2.58 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$37.55, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Genpact analyst has a price target of US$43.00 per share, while the most pessimistic values it at US$35.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Genpact's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.3% growth on an annualised basis. This is compared to a historical growth rate of 6.5% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.1% annually. Factoring in the forecast slowdown in growth, it seems obvious that Genpact is also expected to grow slower than other industry participants.

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 Genpact following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$37.55, 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 Genpact analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Genpact (1 is concerning) you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.