It’s been a mediocre week for Five-Star Business Finance Limited (NSE:FIVESTAR) shareholders, with the stock dropping 14% to ₹444 in the week since its latest third-quarter results. Revenues of ₹6.3b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at ₹9.38, missing estimates by 2.8%. 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. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the consensus forecast from Five-Star Business Finance’s nine analysts is for revenues of ₹30.1b in 2027. This reflects a huge 34% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 20% to ₹45.19. In the lead-up to this report, the analysts had been modelling revenues of ₹30.1b and earnings per share (EPS) of ₹46.53 in 2027. So it looks like there’s been a small decline in overall sentiment after the recent results – there’s been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

View our latest analysis for Five-Star Business Finance

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹709, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Five-Star Business Finance at ₹765 per share, while the most bearish prices it at ₹660. This is a very narrow spread of estimates, implying either that Five-Star Business Finance is an easy company to value, or – more likely – the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Five-Star Business Finance’s past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Five-Star Business Finance’shistorical trends, as the 26% annualised revenue growth to the end of 2027 is roughly in line with the 25% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 23% per year. It’s clear that while Five-Star Business Finance’s revenue growth is expected to continue on its current trajectory, it’s only expected to grow in line with the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Five-Star Business Finance. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at ₹709, 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 Five-Star Business Finance going out to 2028, and you can see them free on our platform here..

However, before you get too enthused, we’ve discovered 2 warning signs for Five-Star Business Finance (1 shouldn’t be ignored!) that you should be aware of.

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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.