Analysts Are Betting On va-Q-tec AG (ETR:VQT) With A Big Upgrade This Week

Celebrations may be in order for va-Q-tec AG (ETR:VQT) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that va-Q-tec will make substantially more sales than they'd previously expected. Investors have been pretty optimistic on va-Q-tec too, with the stock up 22% to €36.70 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

Following the upgrade, the current consensus from va-Q-tec's four analysts is for revenues of €99m in 2021 which - if met - would reflect a substantial 31% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting €0.32 in per-share earnings. Before this latest update, the analysts had been forecasting revenues of €93m and earnings per share (EPS) of €0.34 in 2021. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although there was a nice uplift to revenue, the consensus also made a small dip in to its earnings per share forecasts.

Check out our latest analysis for va-Q-tec

Analysts also upgraded va-Q-tec's price target 11% to €28.85, implying that the higher sales are expected to generate enough value to offset the forecast decline in earnings. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values va-Q-tec at €33.00 per share, while the most bearish prices it at €22.40. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await va-Q-tec shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the va-Q-tec's past performance and to peers in the same industry. The analysts are definitely expecting va-Q-tec's growth to accelerate, with the forecast 31% growth ranking favourably alongside historical growth of 18% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.9% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that va-Q-tec is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. They also upgraded their revenue estimates for next year, and sales are expected 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. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at va-Q-tec.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple va-Q-tec analysts - going out to 2024, 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 decide to trade va-Q-tec, 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. 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@simplywallst.com.