Gran Colombia Gold Corp. (TSE:GCM) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's 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 Gran Colombia Gold from its two analysts is for revenues of US$448m in 2021 which, if met, would be a sizeable 23% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$407m in 2021. It looks like there's been a clear increase in optimism around Gran Colombia Gold, given the decent improvement in revenue forecasts.
Additionally, the consensus price target for Gran Colombia Gold increased 11% to US$9.37, showing a clear increase in optimism from the analysts involved. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Gran Colombia Gold analyst has a price target of US$16.50 per share, while the most pessimistic values it at US$8.79. 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. Next year brings more of the same, according to the analysts, with revenue forecast to grow 23%, in line with its 20% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.7% next year. So it's pretty clear that Gran Colombia Gold is forecast to grow substantially faster than its industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Gran Colombia Gold next year. The analysts also expect revenues to grow faster than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Gran Colombia Gold.
Better yet, Gran Colombia Gold is expected to break-even soon - within the next few years - according to analyst forecasts, which would be a momentous event for shareholders. For more information, you can click through to our free platform to learn more about these forecasts.
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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