Industry Analysts Just Upgraded Their Movida Participações S.A. (BVMF:MOVI3) Revenue Forecasts By 1.4%

Movida Participações S.A. (BVMF:MOVI3) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that Movida Participações will make substantially more sales than they'd previously expected. The stock price has risen 7.7% to R$22.55 over the past week, suggesting investors are becoming more optimistic. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the most recent consensus for Movida Participações from its nine analysts is for revenues of R$4.9b in 2021 which, if met, would be a huge 21% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing R$4.8b of revenue in 2021. Overall it looks like Movida Participações is performing in line with analyst expectations, given the analysts have updated their numbers and there's been no real change to this year's forecast following these updates.

See our latest analysis for Movida Participações

We'd point out that there was no major changes to their price target of R$24.38, suggesting the latest estimates were not enough to shift their view on the value of the business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Movida Participações at R$32.00 per share, while the most bearish prices it at R$16.80. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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 Movida Participações' rate of growth is expected to accelerate meaningfully, with the forecast 45% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 19% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 19% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Movida Participações is expected to grow much faster than its industry.

The Bottom Line

The clear take away from these updates is that analysts made no change to their revenue estimates for this year, with the business apparently performing in line with their models. 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 Movida Participações.

Analysts are clearly in love with Movida Participações at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as concerns around earnings quality. You can learn more, and discover the 2 other flags we've identified, for 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. 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.
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