Rainbows and Unicorns: The Cyclopharm Limited (ASX:CYC) Analyst Just Became A Lot More Optimistic

Shareholders in Cyclopharm Limited (ASX:CYC) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance.

After this upgrade, Cyclopharm's single analyst is now forecasting revenues of AU$19m in 2021. This would be a modest 5.2% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 11% from last year to AU$0.07. Yet prior to the latest estimates, the analyst had been forecasting revenues of AU$17m and losses of AU$0.083 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

View our latest analysis for Cyclopharm

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cyclopharm's past performance and to peers in the same industry. The period to the end of 2021 brings more of the same, according to the analyst, with revenue forecast to display 5.2% growth on an annualised basis. That is in line with its 4.9% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 15% per year. So it's pretty clear that Cyclopharm is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most important thing here is that the analyst reduced their loss per share estimates for this year, reflecting increased optimism around Cyclopharm's prospects. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. More bullish expectations could be a signal for investors to take a closer look at Cyclopharm.

Better yet, Cyclopharm is expected to break-even soon - within the next few years - according to analyst forecasts, which would be a momentous event for shareholders. For more information, you can click through to our free platform to learn more about these forecasts.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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