In This Article:
It's been a mediocre week for Genpact Limited (NYSE:G) shareholders, with the stock dropping 15% to US$42.46 in the week since its latest quarterly results. The result was positive overall - although revenues of US$1.2b were in line with what the analysts predicted, Genpact surprised by delivering a statutory profit of US$0.73 per share, modestly greater than expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Genpact after the latest results.
We've discovered 1 warning sign about Genpact. View them for free.
Following last week's earnings report, Genpact's eleven analysts are forecasting 2025 revenues to be US$4.95b, approximately in line with the last 12 months. Statutory per share are forecast to be US$3.00, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$5.08b and earnings per share (EPS) of US$3.09 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.
View our latest analysis for Genpact
The consensus price target fell 7.3% to US$52.03, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Genpact, with the most bullish analyst valuing it at US$56.00 and the most bearish at US$48.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Genpact is an easy business to forecast or the the analysts are all using similar assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Genpact's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Genpact's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.7% growth on an annualised basis. This is compared to a historical growth rate of 5.9% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.9% per year. Factoring in the forecast slowdown in growth, it seems obvious that Genpact is also expected to grow slower than other industry participants.