News Flash: Analysts Just Made A Sizeable Upgrade To Their Steadfast Group Limited (ASX:SDF) Forecasts

Celebrations may be in order for Steadfast Group Limited (ASX:SDF) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Steadfast Group will make substantially more sales than they'd previously expected.

Following the upgrade, the current consensus from Steadfast Group's nine analysts is for revenues of AU$1.4b in 2023 which - if met - would reflect a notable 17% increase on its sales over the past 12 months. Per-share earnings are expected to step up 10% to AU$0.19. Previously, the analysts had been modelling revenues of AU$1.2b and earnings per share (EPS) of AU$0.19 in 2023. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

Check out our latest analysis for Steadfast Group

It may not be a surprise to see that the analysts have reconfirmed their price target of AU$5.69, implying that the uplift in sales is not expected to greatly contribute to Steadfast Group's valuation in the near term. 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 Steadfast Group at AU$7.00 per share, while the most bearish prices it at AU$5.30. This is a very narrow spread of estimates, implying either that Steadfast Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 17% growth on an annualised basis. That is in line with its 16% 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 2.7% per year. So although Steadfast Group is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Steadfast Group.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Steadfast Group going out to 2025, and you can see them 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. 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.