Celebrations may be in order for Focusrite plc (LON:TUNE) 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 Focusrite will make substantially more sales than they'd previously expected.
After this upgrade, Focusrite's three analysts are now forecasting revenues of UK£178m in 2022. This would be an okay 2.1% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing UK£160m of revenue in 2022. It looks like there's been a clear increase in optimism around Focusrite, given the solid increase in revenue forecasts.
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. We would highlight that Focusrite's revenue growth is expected to slow, with the forecast 2.1% annualised growth rate until the end of 2022 being well below the historical 25% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.7% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Focusrite.
The Bottom Line
The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Focusrite.
Want to learn more? At least one of Focusrite's three analysts has provided estimates 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.
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.
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