Earnings Miss: eClerx Services Limited Missed EPS By 8.6% And Analysts Are Revising Their Forecasts
eClerx Services Limited (NSE:ECLERX) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. eClerx Services missed analyst forecasts, with revenues of ₹12b and statutory earnings per share (EPS) of ₹17.61, falling short by 2.3% and 8.6% respectively. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, eClerx Services' ten analysts are now forecasting revenues of ₹48.7b in 2027. This would be a solid 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 4.9% to ₹82.56. Before this earnings report, the analysts had been forecasting revenues of ₹48.9b and earnings per share (EPS) of ₹84.52 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
View our latest analysis for eClerx Services
The consensus price target held steady at ₹1,865, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values eClerx Services at ₹2,095 per share, while the most bearish prices it at ₹1,520. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. We can infer from the latest estimates that forecasts expect a continuation of eClerx Services'historical trends, as the 16% annualised revenue growth to the end of 2027 is roughly in line with the 16% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 12% annually. So although eClerx Services is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for eClerx Services. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple eClerx Services analysts - going out to 2029, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for eClerx Services 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.