Shareholders of Ethos Limited (NSE:ETHOSLTD) will be pleased this week, given that the stock price is up 11% to ₹2,825 following its latest first-quarter results. Results overall were respectable, with statutory earnings of ₹36.21 per share roughly in line with what the analysts had forecast. Revenues of ₹4.6b came in 3.4% ahead of analyst predictions. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the three analysts covering Ethos are now predicting revenues of ₹21.1b in 2027. If met, this would reflect a substantial 22% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 31% to ₹50.85. Before this earnings report, the analysts had been forecasting revenues of ₹20.7b and earnings per share (EPS) of ₹54.90 in 2027. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a substantial to revenue, the consensus also made a minor downgrade to its earnings per share forecasts.
Check out our latest analysis for Ethos
The analysts also upgraded Ethos' price target 6.8% to ₹3,159, implying that the higher revenue expected to generate enough value to offset the forecast decline in earnings. 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. Currently, the most bullish analyst values Ethos at ₹3,200 per share, while the most bearish prices it at ₹3,117. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Ethos is an easy business to forecast or the the analysts are all using similar assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Ethos' rate of growth is expected to accelerate meaningfully, with the forecast 31% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 23% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Ethos is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. 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.
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 forecasts for Ethos going out to 2029, and you can see them free on our platform here.
You can also see our analysis of Ethos' Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.