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Aster DM Healthcare Limited (NSE:ASTERDM) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 3.0% to hit ₹21b. Aster DM Healthcare also reported a profit of ₹6.62, which was an impressive 21% above what analysts had forecast. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings consensus estimates to see what could be in store for next year.
See our latest analysis for Aster DM Healthcare
Taking into account the latest results, the latest consensus from Aster DM Healthcare's eight analysts is for revenues of ₹91b in 2020, which would reflect an okay 7.0% improvement in sales compared to the last 12 months. Earnings per share are expected to descend 11% to ₹5.40 in the same period. Before this earnings report, analysts had been forecasting revenues of ₹90b and earnings per share (EPS) of ₹7.56 in 2020. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.
The consensus price target held steady at ₹199, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. The most optimistic Aster DM Healthcare analyst has a price target of ₹240 per share, while the most pessimistic values it at ₹168. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
In addition, we can look to Aster DM Healthcare's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. It's pretty clear that analysts expect Aster DM Healthcare's revenue growth will slow down substantially, with revenues next year expected to grow 7.0%, compared to a historical growth rate of 17% over the past year. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 15% per year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Aster DM Healthcare to grow slower than the wider market.