Analyst Forecasts For flatexDEGIRO AG (ETR:FTK) Are Surging Higher

Shareholders in flatexDEGIRO AG (ETR:FTK) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. 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. The market seems to be pricing in some improvement in the business too, with the stock up 7.5% over the past week, closing at €89.45. Could this big upgrade push the stock even higher?

After this upgrade, flatexDEGIRO's six analysts are now forecasting revenues of €425m in 2021. This would be a sizeable 171% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 216% to €4.54. Previously, the analysts had been modelling revenues of €378m and earnings per share (EPS) of €3.71 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.

See our latest analysis for flatexDEGIRO

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of €107, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. The most optimistic flatexDEGIRO analyst has a price target of €118 per share, while the most pessimistic values it at €100.00. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that flatexDEGIRO's rate of growth is expected to accelerate meaningfully, with the forecast 171% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 17% 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 2.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that flatexDEGIRO 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 upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue estimates for this 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 flatexDEGIRO could be a good candidate for more research.

Better yet, our automated discounted cash flow calculation (DCF) suggests flatexDEGIRO could be moderately undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

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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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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