Earnings Update: Physicswallah Limited (NSE:PWL) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts
Physicswallah Limited (NSE:PWL) shareholders are probably feeling a little disappointed, since its shares fell 2.8% to ₹122 in the week after its latest first-quarter results. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Physicswallah's six analysts are now forecasting revenues of ₹49.4b in 2027. This would be a huge 20% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 1,364% to ₹1.03. In the lead-up to this report, the analysts had been modelling revenues of ₹49.8b and earnings per share (EPS) of ₹1.08 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
Check out our latest analysis for Physicswallah
It might be a surprise to learn that the consensus price target was broadly unchanged at ₹141, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Physicswallah analyst has a price target of ₹150 per share, while the most pessimistic values it at ₹132. This is a very narrow spread of estimates, implying either that Physicswallah is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Physicswallah'shistorical trends, as the 28% annualised revenue growth to the end of 2027 is roughly in line with the 32% annual growth over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 20% per year. So although Physicswallah is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at ₹141, with the latest estimates not enough to have an impact on their price targets.
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 estimates - from multiple Physicswallah analysts - going out to 2029, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with Physicswallah .
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