Dr. Lal PathLabs Limited Just Beat EPS By 8.8%: Here's What Analysts Think Will Happen Next
A week ago, Dr. Lal PathLabs Limited (NSE:LALPATHLAB) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. The company beat expectations with revenues of ₹8.7b arriving 2.7% ahead of forecasts. Statutory earnings per share (EPS) were ₹11.47, 8.8% ahead of estimates. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, Dr. Lal PathLabs' 24 analysts are now forecasting revenues of ₹32.7b in 2027. This would be a reasonable 7.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 12% to ₹39.09. In the lead-up to this report, the analysts had been modelling revenues of ₹32.0b and earnings per share (EPS) of ₹37.05 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
See our latest analysis for Dr. Lal PathLabs
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of ₹2,069, suggesting that the forecast performance does not have a long term impact on the company's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Dr. Lal PathLabs at ₹2,500 per share, while the most bearish prices it at ₹1,180. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Dr. Lal PathLabs' growth to accelerate, with the forecast 16% annualised growth to the end of 2027 ranking favourably alongside historical growth of 8.5% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 18% per year. Dr. Lal PathLabs is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Dr. Lal PathLabs following these results. They also upgraded their revenue forecasts, although the latest estimates suggest that Dr. Lal PathLabs will grow in line with the overall 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 Dr. Lal PathLabs going out to 2029, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Dr. Lal PathLabs that you need to be mindful of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.