News Flash: Analysts Just Made A Sizeable Upgrade To Their Dream Unlimited Corp. (TSE:DRM) Forecasts

Celebrations may be in order for Dream Unlimited Corp. (TSE:DRM) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

Following the upgrade, the current consensus from Dream Unlimited's sole analyst is for revenues of CA$281m in 2021 which - if met - would reflect a decent 17% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analyst forecasting CA$1.63 in per-share earnings. Before this latest update, the analyst had been forecasting revenues of CA$251m and earnings per share (EPS) of CA$1.31 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for Dream Unlimited

It will come as no surprise to learn that the analyst has increased their price target for Dream Unlimited 5.2% to CA$34.00 on the back of these upgrades. 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. There are some variant perceptions on Dream Unlimited, with the most bullish analyst valuing it at CA$37.00 and the most bearish at CA$31.00 per share. This is a very narrow spread of estimates, implying either that Dream Unlimited is an easy company to value, or - more likely - the analyst is relying heavily on some key assumptions.

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 Dream Unlimited's rate of growth is expected to accelerate meaningfully, with the forecast 38% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 7.2% 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 6.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Dream Unlimited to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Dream Unlimited could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Dream Unlimited going out as far as 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.

If you're looking for stocks to buy, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.