The analysts might have been a bit too bullish on Waaree Energies Limited (NSE:WAAREEENER), given that the company fell short of expectations when it released its quarterly results last week. Waaree Energies missed earnings this time around, with ₹79b revenue coming in 2.9% below what the analysts had modelled. Statutory earnings per share (EPS) of ₹29.50 also fell short of expectations by 19%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from Waaree Energies' 15 analysts is for revenues of ₹346.3b in 2027. This reflects a meaningful 15% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 16% to ₹154. Before this earnings report, the analysts had been forecasting revenues of ₹352.6b and earnings per share (EPS) of ₹159 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
See our latest analysis for Waaree Energies
It might be a surprise to learn that the consensus price target fell 5.4% to ₹3,302, with the analysts clearly linking lower forecast earnings to the performance of the stock price. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Waaree Energies, with the most bullish analyst valuing it at ₹4,375 and the most bearish at ₹2,430 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. We would highlight that Waaree Energies' revenue growth is expected to slow, with the forecast 21% annualised growth rate until the end of 2027 being well below the historical 94% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 20% annually. Factoring in the forecast slowdown in growth, it looks like Waaree Energies is forecast to grow at about the same rate as 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 Waaree Energies. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 forecasts for Waaree Energies going out to 2029, and you can see them free on our platform here.
You can also see our analysis of Waaree Energies' Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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