Méliuz S.A. (BVMF:CASH3) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.
After the upgrade, the four analysts covering Méliuz are now predicting revenues of R$479m in 2022. If met, this would reflect a major 59% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 44% to R$0.034. However, before this estimates update, the consensus had been expecting revenues of R$420m and R$0.09 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
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 pretty clear that there is an expectation that Méliuz's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 85% growth on an annualised basis. This is compared to a historical growth rate of 107% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% annually. Even after the forecast slowdown in growth, it seems obvious that Méliuz 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 Méliuz 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. More bullish expectations could be a signal for investors to take a closer look at Méliuz.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Méliuz analysts - going out to 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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