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There's been a notable change in appetite for Sify Technologies Limited (NASDAQ:SIFY) shares in the week since its quarterly report, with the stock down 11% to US$2.10. Revenues were ₹6.3b, with Sify Technologies reporting some 6.6% below analyst expectations. Following the result, the analyst has 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. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from Sify Technologies' single analyst is for revenues of ₹29.5b in 2022, which would reflect a huge 27% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 80% to ₹7.29. Before this earnings report, the analyst had been forecasting revenues of ₹28.4b and earnings per share (EPS) of ₹6.56 in 2022. So it seems there's been a definite increase in optimism about Sify Technologies' future following the latest results, with a substantial gain in the earnings per share forecasts in particular.
With these upgrades, we're not surprised to see that the analyst has lifted their price target 25% to US$5.00per share.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Sify Technologies' rate of growth is expected to accelerate meaningfully, with the forecast 27% revenue growth noticeably faster than its historical growth of 8.7%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.7% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Sify Technologies is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Sify Technologies' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analyst clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Sify Technologies going out as far as 2023, and you can see them free on our platform here.
Before you take the next step you should know about the 2 warning signs for Sify Technologies that we have uncovered.
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. 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.
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