Astra Microwave Products Limited Recorded A 22% Miss On Revenue: Analysts Are Revisiting Their Models
Astra Microwave Products Limited (NSE:ASTRAMICRO) shareholders are probably feeling a little disappointed, since its shares fell 8.0% to ₹1,665 in the week after its latest first-quarter results. Revenues were ₹1.8b, 22% shy of what the analysts were expecting, although statutory earnings of ₹20.27 per share were roughly in line with what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Astra Microwave Products after the latest results.
Taking into account the latest results, the current consensus from Astra Microwave Products' eight analysts is for revenues of ₹13.7b in 2027. This would reflect a decent 20% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 33% to ₹25.87. In the lead-up to this report, the analysts had been modelling revenues of ₹14.0b and earnings per share (EPS) of ₹24.47 in 2027. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.
Check out our latest analysis for Astra Microwave Products
The average price target rose 9.9% to ₹1,628, with the analysts signalling that the improved earnings outlook is the key driver of value for shareholders - enough to offset the reduction in revenue estimates. 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 Astra Microwave Products analyst has a price target of ₹2,233 per share, while the most pessimistic values it at ₹1,069. 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.
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. The analysts are definitely expecting Astra Microwave Products' growth to accelerate, with the forecast 27% annualised growth to the end of 2027 ranking favourably alongside historical growth of 10% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 34% annually. So it's clear that despite the acceleration in growth, Astra Microwave Products is expected to grow meaningfully slower than the industry average.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Astra Microwave Products' earnings potential next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Astra Microwave Products. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Astra Microwave Products going out to 2029, and you can see them free on our platform here..
It might also be worth considering whether Astra Microwave Products' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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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.