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Results: Dixon Technologies (India) Limited Beat Earnings Expectations And Analysts Now Have New Forecasts

Simply Wall St

Dixon Technologies (India) Limited (NSE:DIXON) 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 6.9% to hit ₹25b. Dixon Technologies (India) also reported a profit of ₹36.39, which was an impressive 63% above what analysts had forecast. 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. So we gathered the latest post-earnings forecasts to see what analysts are forecasting for next year.

Check out our latest analysis for Dixon Technologies (India)

NSEI:DIXON Past and Future Earnings, November 16th 2019

Following the latest results, Dixon Technologies (India)'s nine analysts are now forecasting revenues of ₹49.3b in 2020. This would be a notable 17% improvement in sales compared to the last 12 months. Earnings per share are expected to increase 9.2% to ₹97.20. Yet prior to the latest earnings, analysts had been forecasting revenues of ₹42.9b and earnings per share (EPS) of ₹83.35 in 2020. So we can see there's been a pretty clear increase in analyst sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Although analysts have upgraded their earnings estimates, there was no change to the consensus price target of ₹2,919, suggesting that the forecast performance does not have a long term impact on the company's 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 Dixon Technologies (India) analyst has a price target of ₹3,500 per share, while the most pessimistic values it at ₹2,230. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Dixon Technologies (India)'s past performance and to peers in the same market. It's pretty clear that analysts expect Dixon Technologies (India)'s revenue growth will slow down substantially, with revenues next year expected to grow 17%, compared to a historical growth rate of 61% over the past year. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkDixon Technologies (India) will grow faster than the wider market.

The Bottom Line

The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Dixon Technologies (India) following these results. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider market. The consensus price target held steady at ₹2,919, with the latest estimates not enough to have an impact on analysts' estimated valuations.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Dixon Technologies (India) analysts - going out to 2022, and you can see them free on our platform here.

You can also see whether Dixon Technologies (India) is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.