Earnings Miss: Smartworks Coworking Spaces Limited Missed EPS By 26% And Analysts Are Revising Their Forecasts
It's been a good week for Smartworks Coworking Spaces Limited (NSE:SMARTWORKS) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.9% to ₹483. Statutory earnings per share fell badly short of expectations, coming in at ₹1.15, some 26% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at ₹5.5b. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from Smartworks Coworking Spaces' six analysts is for revenues of ₹23.3b in 2027. This would reflect a decent 19% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 134% to ₹5.72. Before this earnings report, the analysts had been forecasting revenues of ₹23.6b and earnings per share (EPS) of ₹7.55 in 2027. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.
View our latest analysis for Smartworks Coworking Spaces
It might be a surprise to learn that the consensus price target was broadly unchanged at ₹638, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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. There are some variant perceptions on Smartworks Coworking Spaces, with the most bullish analyst valuing it at ₹725 and the most bearish at ₹534 per share. This is a very narrow spread of estimates, implying either that Smartworks Coworking Spaces is an easy company to value, or - more likely - the analysts are relying heavily on some key 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. We would highlight that Smartworks Coworking Spaces' revenue growth is expected to slow, with the forecast 26% annualised growth rate until the end of 2027 being well below the historical 40% growth over the last year. Compare this to the 199 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 21% per year. Factoring in the forecast slowdown in growth, it looks like Smartworks Coworking Spaces 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 Smartworks Coworking Spaces. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at ₹638, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Smartworks Coworking Spaces. 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 Smartworks Coworking Spaces going out to 2029, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for Smartworks Coworking Spaces that we have uncovered.
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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.