Celebrations may be in order for PropTech Group Limited (ASX:PTG) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Investor sentiment seems to be improving too, with the share price up 4.9% to AU$0.54 over the past 7 days. Could this big upgrade push the stock even higher?
After this upgrade, PropTech Group's lone analyst is now forecasting revenues of AU$20m in 2022. This would be a major 26% improvement in sales compared to the last 12 months. Per-share losses are expected to see a sharp uptick, reaching AU$0.011. Yet before this consensus update, the analyst had been forecasting revenues of AU$18m and losses of AU$0.025 per share in 2022. We can see there's definitely been a change in sentiment in this update, with the analyst administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.
It will come as no surprise to learn that the analyst has increased their price target for PropTech Group 15% to AU$1.27 on the back of these upgrades.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that PropTech Group's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 26% growth on an annualised basis. This is compared to a historical growth rate of 76% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% annually. Even after the forecast slowdown in growth, it seems obvious that PropTech Group is also expected to grow faster than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting PropTech Group is moving incrementally towards profitability. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, PropTech Group could be worth investigating further.
That's a pretty serious upgrade, but shareholders might be even more pleased to know that forecasts expect PropTech Group to be able to reach break-even within the next few years. You can learn more about these forecasts, for free on our platform here.
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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.