Genpact Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
Investors in Genpact Limited (NYSE:G) had a good week, as its shares rose 4.1% to close at US$36.53 following the release of its yearly results. It looks like a credible result overall - although revenues of US$4.5b were what the analysts expected, Genpact surprised by delivering a (statutory) profit of US$3.41 per share, an impressive 39% above what was forecast. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Genpact
Taking into account the latest results, the current consensus from Genpact's eleven analysts is for revenues of US$4.60b in 2024. This would reflect a modest 2.8% increase on its revenue over the past 12 months. Statutory earnings per share are expected to plummet 27% to US$2.56 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.68b and earnings per share (EPS) of US$2.60 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$38.82, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Genpact at US$43.00 per share, while the most bearish prices it at US$36.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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. We would highlight that Genpact's revenue growth is expected to slow, with the forecast 2.8% annualised growth rate until the end of 2024 being well below the historical 7.5% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that Genpact is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$38.82, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Genpact going out to 2026, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 2 warning signs for Genpact (of which 1 shouldn't be ignored!) you should know about.
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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.
