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Last week saw the newest quarterly earnings release from Strides Pharma Science Limited (NSE:STAR), an important milestone in the company’s journey to build a stronger business. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 4.7%to hit ₹9.4b. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Strides Pharma Science
Following the latest results, Strides Pharma Science’s four analysts are now forecasting revenues of ₹42.1b in 2023. This would be a huge 27% improvement in sales compared to the last 12 months. Strides Pharma Science is also expected to turn profitable, with statutory earnings of ₹14.80 per share. Before this earnings report, the analysts had been forecasting revenues of ₹40.0b and earnings per share (EPS) of ₹11.30 in 2023. So it seems there’s been a definite increase in optimism about Strides Pharma Science’s future following the latest results, with a sizeable expansion in the earnings per share forecasts in particular.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of ₹449, suggesting that the forecast performance does not have a long term impact on the company’s valuation. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. The most optimistic Strides Pharma Science analyst has a price target of ₹534 per share, while the most pessimistic values it at ₹392. As you can see, analysts are not all in agreement on the stock’s future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Strides Pharma Science is forecast to grow faster in the future than it has in the past, with revenues expected to display 37% annualised growth until the end of 2023. If achieved, this would be a much better result than the 0.5% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 11% per year. Not only are Strides Pharma Science’s revenues expected to improve, it seems that the analysts are also expecting it 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 Strides Pharma Science following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at ₹449, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Strides Pharma Science going out to 2024, and you can see them free on our platform here..
You still need to take note of risks, for example – Strides Pharma Science has 1 warning sign we think you should be aware 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.
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