Industry Analysts Just Made An Upgrade To Their Black Diamond Group Limited (TSE:BDI) Revenue Forecasts

Black Diamond Group Limited (TSE:BDI) 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 Black Diamond Group will make substantially more sales than they'd previously expected.

After the upgrade, the five analysts covering Black Diamond Group are now predicting revenues of CA$260m in 2021. If met, this would reflect a major 30% improvement in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting CA$0.13 in per-share earnings. Prior to this update, the analysts had been forecasting revenues of CA$243m and earnings per share (EPS) of CA$0.11 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a sizeable expansion in earnings per share in particular.

Check out our latest analysis for Black Diamond Group

It will come as no surprise to learn that the analysts have increased their price target for Black Diamond Group 13% to CA$5.30 on the back of these upgrades. 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 Black Diamond Group at CA$5.00 per share, while the most bearish prices it at CA$4.50. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Black Diamond Group is an easy business to forecast or the underlying assumptions are obvious.

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 clear from the latest estimates that Black Diamond Group's rate of growth is expected to accelerate meaningfully, with the forecast 41% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 1.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Black Diamond Group to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Black Diamond Group.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Black Diamond Group going out to 2022, and you can see them 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.

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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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