Stock Analysis

Need To Know: Analysts Are Much More Bullish On Ecoslops S.A. (EPA:ALESA)

ENXTPA:ALESA
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Celebrations may be in order for Ecoslops S.A. (EPA:ALESA) shareholders, with the analysts 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 Ecoslops' two analysts is for revenues of €25m in 2022 which - if met - would reflect a sizeable 102% increase on its sales over the past 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of €0.45 per share this year. Before this latest update, the analysts had been forecasting revenues of €22m and earnings per share (EPS) of €0.13 in 2022. 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 Ecoslops

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ENXTPA:ALESA Earnings and Revenue Growth April 23rd 2022

Despite these upgrades, the analysts have not made any major changes to their price target of €16.40, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. The most optimistic Ecoslops analyst has a price target of €19.00 per share, while the most pessimistic values it at €13.80. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Ecoslops' rate of growth is expected to accelerate meaningfully, with the forecast 102% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 10% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Ecoslops 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. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Ecoslops.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

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.

Valuation is complex, but we're here to simplify it.

Discover if Ecoslops might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.

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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.