One Analyst's Earnings Estimates For Merus Power Oyj (HEL:MERUS) Are Surging Higher

Shareholders in Merus Power Oyj (HEL:MERUS) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. The analyst greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investors have been pretty optimistic on Merus Power Oyj too, with the stock up 20% to €4.86 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 latest consensus from Merus Power Oyj's one analyst is for revenues of €31m in 2024, which would reflect a credible 2.6% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 43% to €0.06. However, before this estimates update, the consensus had been expecting revenues of €28m and €0.07 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analyst administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

Check out our latest analysis for Merus Power Oyj

The consensus price target rose 35% to €5.00, with the analyst encouraged by the higher revenue and lower forecast losses for this year.

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 Merus Power Oyj's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.6% growth on an annualised basis. This is compared to a historical growth rate of 42% over the past three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.2% annually. Factoring in the forecast slowdown in growth, it seems obvious that Merus Power Oyj is also expected to grow slower than other industry participants.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Merus Power Oyj is moving incrementally towards profitability. Pleasantly, the analyst also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Merus Power Oyj could be worth investigating further.

It's great to see this analyst upgrading their estimates, but the biggest highlight to us is that the business is expected to become profitable in the foreseeable future. For more information, you can click through to our free platform to learn more about these forecasts.

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. 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.