Growth Investors: Industry Analysts Just Upgraded Their Draper Esprit plc (LON:GROW) Revenue Forecasts By 45%

Celebrations may be in order for Draper Esprit plc (LON:GROW) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. 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 most recent consensus for Draper Esprit from its two analysts is for revenues of UK£171m in 2021 which, if met, would be a major 232% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of UK£118m in 2021. The consensus has definitely become more optimistic, showing a chunky increase in revenue forecasts.

See our latest analysis for Draper Esprit

The consensus price target rose 13% to UK£8.13, with the analysts clearly more optimistic about Draper Esprit's prospects following this update. 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. There are some variant perceptions on Draper Esprit, with the most bullish analyst valuing it at UK£9.67 and the most bearish at UK£6.61 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Draper Esprit's rate of growth is expected to accelerate meaningfully, with the forecast 232% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 29% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.5% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Draper Esprit to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They're also forecasting more rapid revenue growth than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Draper Esprit.

Unsatisfied? At least one of Draper Esprit's two 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.

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