Earnings Beat: Shadowfax Technologies Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
A week ago, Shadowfax Technologies Limited (NSE:SHADOWFAX) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 6.5% to hit ₹14b. Shadowfax Technologies reported statutory earnings per share (EPS) ₹1.10, which was a notable 17% above what the analysts had forecast. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Shadowfax Technologies' five analysts are now forecasting revenues of ₹59.8b in 2027. This would be a sizeable 26% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 63% to ₹4.70. In the lead-up to this report, the analysts had been modelling revenues of ₹56.7b and earnings per share (EPS) of ₹3.55 in 2027. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a massive increase in earnings per share in particular.
Check out our latest analysis for Shadowfax Technologies
It will come as no surprise to learn that the analysts have increased their price target for Shadowfax Technologies 7.0% to ₹262on the back of these upgrades. 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 Shadowfax Technologies analyst has a price target of ₹300 per share, while the most pessimistic values it at ₹200. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Shadowfax Technologies shareholders.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Shadowfax Technologies' revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 37% growth on an annualised basis. This is compared to a historical growth rate of 71% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.9% per year. Even after the forecast slowdown in growth, it seems obvious that Shadowfax Technologies is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Shadowfax Technologies 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. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Shadowfax Technologies. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Shadowfax Technologies analysts - going out to 2029, and you can see them free on our platform here.
You still need to take note of risks, for example - Shadowfax Technologies has 1 warning sign we think you should be aware of.
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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.