Industry Analysts Just Upgraded Their Appreciate Group plc (LON:APP) Revenue Forecasts By 15%

Appreciate Group plc (LON:APP) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Appreciate Group will make substantially more sales than they'd previously expected. The stock price has risen 9.7% to UK£0.29 over the past week, suggesting investors are becoming more optimistic. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the latest upgrade, Appreciate Group's three analysts currently expect revenues in 2023 to be UK£122m, approximately in line with the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of UK£107m in 2023. The consensus has definitely become more optimistic, showing a nice gain to revenue forecasts.

View our latest analysis for Appreciate Group

There was no particular change to the consensus price target of UK£0.61, with Appreciate Group's latest outlook seemingly not enough to result in a change of valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Appreciate Group analyst has a price target of UK£0.66 per share, while the most pessimistic values it at UK£0.55. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Appreciate Group's past performance and to peers in the same industry. We would highlight that Appreciate Group's revenue growth is expected to slow, with the forecast 1.7% annualised growth rate until the end of 2023 being well below the historical 13% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 25% per year. Factoring in the forecast slowdown in growth, it seems obvious that Appreciate Group is also expected to grow slower than other industry participants.

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 Appreciate Group.

Better yet, our automated discounted cash flow calculation (DCF) suggests Appreciate Group could be moderately undervalued. You can learn more about our valuation methodology 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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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.