Industry Analysts Just Made A Substantial Upgrade To Their Frontier Digital Ventures Limited (ASX:FDV) Revenue Forecasts

Frontier Digital Ventures Limited (ASX:FDV) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the upgrade, the most recent consensus for Frontier Digital Ventures from its dual analysts is for revenues of AU$53m in 2021 which, if met, would be a sizeable 154% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of AU$45m in 2021. It looks like there's been a clear increase in optimism around Frontier Digital Ventures, given the decent improvement in revenue forecasts.

Check out our latest analysis for Frontier Digital Ventures

We'd point out that there was no major changes to their price target of AU$1.67, suggesting the latest estimates were not enough to shift their view on the value of the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Frontier Digital Ventures at AU$1.63 per share, while the most bearish prices it at AU$1.62. This is a very narrow spread of estimates, implying either that Frontier Digital Ventures is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Frontier Digital Ventures' rate of growth is expected to accelerate meaningfully, with the forecast 154% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 25% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Frontier Digital Ventures to grow faster than the wider 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. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Frontier Digital Ventures.

That's a pretty serious upgrade, but shareholders might be even more pleased to know that forecasts expect Frontier Digital Ventures to be able to reach break-even within the next few years. For more information, you can click through to our free platform to learn more about these forecasts.

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