Analysts Are Betting On SG Fleet Group Limited (ASX:SGF) With A Big Upgrade This Week

Celebrations may be in order for SG Fleet Group Limited (ASX:SGF) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the upgrade, the latest consensus from SG Fleet Group's four analysts is for revenues of AU$848m in 2022, which would reflect a huge 26% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of AU$553m in 2022. The consensus has definitely become more optimistic, showing a very substantial lift in revenue forecasts.

View our latest analysis for SG Fleet Group

We'd point out that there was no major changes to their price target of AU$3.38, suggesting the latest estimates were not enough to shift their view on the value of the business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values SG Fleet Group at AU$3.62 per share, while the most bearish prices it at AU$2.98. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that SG Fleet Group's rate of growth is expected to accelerate meaningfully, with the forecast 58% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 10% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that SG Fleet Group is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They're also forecasting more rapid revenue growth than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at SG Fleet Group.

Analysts are clearly in love with SG Fleet Group at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 2 other risks we've identified .

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.