Industry Analysts Just Made A Meaningful Upgrade To Their Somero Enterprises, Inc. (LON:SOM) Revenue Forecasts

Somero Enterprises, Inc. (LON:SOM) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.

Following the upgrade, the current consensus from Somero Enterprises' dual analysts is for revenues of US$110m in 2021 which - if met - would reflect a sizeable 24% increase on its sales over the past 12 months. Statutory earnings per share are presumed to soar 23% to US$0.41. Before this latest update, the analysts had been forecasting revenues of US$97m and earnings per share (EPS) of US$0.38 in 2021. The most recent forecasts are noticeably more optimistic, with a solid increase in revenue estimates and a lift to earnings per share as well.

View our latest analysis for Somero Enterprises

With these upgrades, we're not surprised to see that the analysts have lifted their price target 13% to US$8.14 per share.

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 clear from the latest estimates that Somero Enterprises' rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 4.0% 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 5.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Somero Enterprises 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. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better 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. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Somero Enterprises.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Somero Enterprises going out as far as 2022, and you can see them 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.

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