Earnings Miss: Five-Star Business Finance Limited Missed EPS By 6.0% And Analysts Are Revising Their Forecasts

It’s been a mediocre week for Five-Star Business Finance Limited (NSE:FIVESTAR) shareholders, with the stock dropping 16% to ₹611 in the week since its latest quarterly results. Revenues of ₹6.0b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at ₹9.02, missing estimates by 6.0%. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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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After the latest results, the eleven analysts covering Five-Star Business Finance are now predicting revenues of ₹25.6b in 2026. If met, this would reflect a meaningful 19% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 7.1% to ₹39.56. In the lead-up to this report, the analysts had been modelling revenues of ₹26.0b and earnings per share (EPS) of ₹41.42 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

View our latest analysis for Five-Star Business Finance

It might be a surprise to learn that the consensus price target fell 7.4% to ₹762, with the analysts clearly linking lower forecast earnings to the performance of the stock price. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. Currently, the most bullish analyst values Five-Star Business Finance at ₹850 per share, while the most bearish prices it at ₹680. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 2026 is roughly in line with the 27% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 22% annually. So although Five-Star Business Finance is expected to maintain its revenue growth rate, it’s only growing at about the rate of the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. We have forecasts for Five-Star Business Finance going out to 2028, 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 2 warning signs for Five-Star Business Finance (1 is significant!) that you need to be mindful 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.