Forecast: Analysts Think Voyager Digital Ltd.'s (CSE:VYGR) Business Prospects Have Improved Drastically

Celebrations may be in order for Voyager Digital Ltd. (CSE:VYGR) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance. Investors have been pretty optimistic on Voyager Digital too, with the stock up 15% to CA$23.35 over the past week. Could this upgrade be enough to drive the stock even higher?

After this upgrade, Voyager Digital's three analysts are now forecasting revenues of US$487m in 2022. This would be a major improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of US$1.07 per share next year. Previously, the analysts had been modelling revenues of US$385m and earnings per share (EPS) of US$0.95 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for Voyager Digital

Despite these upgrades, the analysts have not made any major changes to their price target of US$34.33, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Voyager Digital at US$54.27 per share, while the most bearish prices it at US$28.09. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Voyager Digital's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 4x growth on an annualised basis. This is compared to a historical growth rate of 13,002% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 19% per year. Even after the forecast slowdown in growth, it seems obvious that Voyager Digital is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for next year, expecting improving business conditions. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Voyager Digital could be a good candidate for more research.

Analysts are clearly in love with Voyager Digital at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as recent substantial insider selling. For more information, you can click through to our platform to learn more about this and the 2 other warning signs we've identified .

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. 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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