Analysts Just Published A Bright New Outlook For SciDev Limited's (ASX:SDV)

SciDev Limited (ASX:SDV) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market may be pricing in some blue sky too, with the share price gaining 25% to AU$0.32 in the last 7 days. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

After this upgrade, SciDev's twin analysts are now forecasting revenues of AU$84m in 2023. This would be a substantial 50% improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of AU$0.02 per share this year. Prior to this update, the analysts had been forecasting revenues of AU$68m and earnings per share (EPS) of AU$0.01 in 2023. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for SciDev

With these upgrades, we're not surprised to see that the analysts have lifted their price target 13% to AU$0.52 per share.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the SciDev's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of SciDev'shistorical trends, as the 50% annualised revenue growth to the end of 2023 is roughly in line with the 62% annual revenue 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 6.7% per year. So although SciDev 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 from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at SciDev.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for SciDev going out as far as 2024, and you can see them free on our platform here.

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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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.