Vodafone Idea Limited (NSE:IDEA) First-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year
It's been a good week for Vodafone Idea Limited (NSE:IDEA) shareholders, because the company has just released its latest first-quarter results, and the shares gained 5.5% to ₹13.50. Revenues of ₹117b arrived in line with expectations, although statutory losses per share were ₹0.35, an impressive 36% smaller than what broker models predicted. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Vodafone Idea's 21 analysts is for revenues of ₹494.6b in 2027. This would reflect a notable 8.8% increase on its revenue over the past 12 months. The company is forecast to report a statutory loss of ₹1.69 in 2027, a sharp decline from a profit over the last year. Yet prior to the latest earnings, the analysts had been forecasting revenues of ₹496.4b and losses of ₹1.74 per share in 2027. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
See our latest analysis for Vodafone Idea
The average price target held steady at ₹11.86, seeming to indicate that business is performing in line with expectations. 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 Vodafone Idea, with the most bullish analyst valuing it at ₹18.70 and the most bearish at ₹5.50 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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 Vodafone Idea's rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 2.9% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Vodafone Idea is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Vodafone Idea going out to 2029, and you can see them free on our platform here.
You still need to take note of risks, for example - Vodafone Idea has 4 warning signs (and 3 which don't sit too well with us) we think 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.