Dish TV India Limited (NSE:DISHTV) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was a pretty negative result overall, with revenues of ₹8.9b missing analyst predictions by 3.7%. Worse, the business reported a loss of ₹0.47 per share, a substantial decline on analyst expectations of a profit. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see analysts' latest post-earnings forecasts for next year.
Taking into account the latest results, the 17 analysts covering Dish TV India provided consensus estimates of ₹41.2b revenue in 2020, which would reflect a not inconsiderable 13% decline on its sales over the past 12 months. Dish TV India is also expected to turn profitable, with earnings of ₹0.56 per share. Before this earnings report, analysts had been forecasting revenues of ₹41.0b and earnings per share (EPS) of ₹0.46 in 2020. Although the revenue estimates have not really changed, we can see there's been a very substantial lift in earnings per share expectations, suggesting that analysts have become more bullish after the latest result.
The consensus price target fell 5.8% to ₹30.21, suggesting the increase in earnings forecasts was not enough to offset other analyst concerns. 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 Dish TV India analyst has a price target of ₹51.00 per share, while the most pessimistic values it at ₹17.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Dish TV India's performance in recent years. These estimates imply that sales are expected to slow, with a forecast revenue decline of 13% a significant reduction from annual growth of 27% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 11% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Dish TV India to grow slower than the wider market.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Dish TV India's earnings potential next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Dish TV India's revenues are expected to perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Dish TV India's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Dish TV India. 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 Dish TV India going out to 2022, and you can see them free on our platform here..
You can also see whether Dish TV India is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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