Stock Analysis

Industry Analysts Just Made A Notable Upgrade To Their Light S.A. (BVMF:LIGT3) Revenue Forecasts

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Light S.A. (BVMF:LIGT3) 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 Light from its nine analysts is for revenues of R$18b in 2022 which, if met, would be a major 24% increase on its sales over the past 12 months. Statutory earnings per share are supposed to nosedive 97% to R$0.03 in the same period. Before this latest update, the analysts had been forecasting revenues of R$15b and earnings per share (EPS) of R$0.79 in 2022. Although sales sentiment looks to be improving, the analysts have made a pretty serious decline to per-share earnings estimates, showing a sharp increase in pessimism recently.

View our latest analysis for Light

BOVESPA:LIGT3 Earnings and Revenue Growth May 14th 2022

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Light's growth to accelerate, with the forecast 33% annualised growth to the end of 2022 ranking favourably alongside historical growth of 7.3% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 0.3% per year. So it's clear with the acceleration in growth, Light is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Light. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better 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 Light.

Analysts are definitely bullish on Light, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including its declining profit margins. You can learn more, and discover the 4 other concerns we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

Valuation is complex, but we're helping make it simple.

Find out whether Light is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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