Growth Investors: Industry Analysts Just Upgraded Their Auxly Cannabis Group Inc. (TSE:XLY) Revenue Forecasts By 8.2%

Auxly Cannabis Group Inc. (TSE:XLY) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline. Investors have been pretty optimistic on Auxly Cannabis Group too, with the stock up 13% to CA$0.26 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

After this upgrade, Auxly Cannabis Group's four analysts are now forecasting revenues of CA$75m in 2021. This would be a substantial 48% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CA$70m in 2021. It looks like there's been a clear increase in sentiment after the latest consensus updates, given the modest lift to revenue estimates.

See our latest analysis for Auxly Cannabis Group

The consensus price target rose 8.1% to CA$0.50, with the analysts clearly more optimistic about Auxly Cannabis Group's prospects following this update. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Auxly Cannabis Group at CA$0.60 per share, while the most bearish prices it at CA$0.40. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. The analysts are definitely expecting Auxly Cannabis Group's growth to accelerate, with the forecast 119% annualised growth to the end of 2021 ranking favourably alongside historical growth of 83% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 32% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Auxly Cannabis Group is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They're also forecasting more rapid revenue growth 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 Auxly Cannabis Group.

Unanswered questions? At least one of Auxly Cannabis Group's four analysts has provided estimates out to 2023, which can be seen 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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