Upgrade: The Latest Revenue Forecasts For Mach7 Technologies Limited (ASX:M7T)

Mach7 Technologies Limited (ASX:M7T) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with the analyst now much more optimistic on its sales pipeline.

Following the upgrade, the most recent consensus for Mach7 Technologies from its single analyst is for revenues of AU$23m in 2021 which, if met, would be a major 35% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analyst forecasting AU$0.001 in per-share earnings. Prior to this update, the analyst had been forecasting revenues of AU$20m and earnings per share (EPS) of AU$0.021 in 2021. Although sales sentiment looks to be improving, the analyst has made a large cut to per-share earnings estimates, showing a sharp increase in pessimism recently.

See our latest analysis for Mach7 Technologies

Curiously, the consensus price target rose 12% to AU$1.68. We can only conclude that the forecast revenue growth is expected to offset the impact of the expected fall in earnings.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Mach7 Technologies' rate of growth is expected to accelerate meaningfully, with the forecast 35% revenue growth noticeably faster than its historical growth of 25% p.a. 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 22% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Mach7 Technologies is expected to grow much faster than its industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Mach7 Technologies. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also a nice increase in the price target, with the analyst apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Mach7 Technologies.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

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. 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.
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