Analysts Just Shipped A Notable Upgrade To Their 888 Holdings plc (LON:888) Estimates

888 Holdings plc (LON:888) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory 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 may be pricing in some blue sky too, with the share price gaining 14% to UK£3.78 in the last 7 days. Could this upgrade be enough to drive the stock even higher?

Following this upgrade, 888 Holdings' nine analysts are forecasting 2021 revenues to be US$864m, approximately in line with the last 12 months. Statutory earnings per share are presumed to leap 656% to US$0.23. Before this latest update, the analysts had been forecasting revenues of US$785m and earnings per share (EPS) of US$0.21 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.

Check out our latest analysis for 888 Holdings

With these upgrades, we're not surprised to see that the analysts have lifted their price target 14% to US$5.64 per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values 888 Holdings at US$4.20 per share, while the most bearish prices it at US$3.58. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that 888 Holdings' revenue growth is expected to slow, with the forecast 1.7% annualised growth rate until the end of 2021 being well below the historical 8.0% 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 13% annually. Factoring in the forecast slowdown in growth, it seems obvious that 888 Holdings is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at 888 Holdings.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple 888 Holdings analysts - going out to 2023, and you can see them free on our platform here.

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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