Zee Entertainment Enterprises Limited Just Missed EPS By 32%: Here’s What Analysts Think Will Happen Next

Zee Entertainment Enterprises Limited (NSE:ZEEL) shareholders are probably feeling a little disappointed, since its shares fell 9.1% to ₹81.39 in the week after its latest quarterly results. Statutory earnings per share fell badly short of expectations, coming in at ₹1.62, some 32% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at ₹23b. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Following the latest results, Zee Entertainment Enterprises’ 16 analysts are now forecasting revenues of ₹87.3b in 2027. This would be a modest 5.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 44% to ₹8.47. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹88.5b and earnings per share (EPS) of ₹9.81 in 2027. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

See our latest analysis for Zee Entertainment Enterprises

The average price target fell 14% to ₹116, with reduced earnings forecasts clearly tied to a lower valuation estimate. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Zee Entertainment Enterprises, with the most bullish analyst valuing it at ₹160 and the most bearish at ₹80.00 per share. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Zee Entertainment Enterprises’ growth to accelerate, with the forecast 4.7% annualised growth to the end of 2027 ranking favourably alongside historical growth of 0.8% per annum 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 10% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Zee Entertainment Enterprises is expected to grow slower than 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it’s tracking in line with expectations. Although our data does suggest that Zee Entertainment Enterprises’ revenue is expected to perform worse than 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 Zee Entertainment Enterprises going out to 2028, and you can see them free on our platform here.

However, before you get too enthused, we’ve discovered 1 warning sign for Zee Entertainment Enterprises that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.