One SDI Group plc (LON:SDI) Analyst Just Lifted Their Revenue Forecasts By A Sizeable 12%

SDI Group plc (LON:SDI) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analyst now much more optimistic on its sales pipeline. SDI Group has also found favour with investors, with the stock up a notable 15% to UK£0.99 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

After this upgrade, SDI Group's one analyst is now forecasting revenues of UK£33m in 2021. This would be a substantial 34% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 31% to UK£0.035. Prior to this update, the analyst had been forecasting revenues of UK£29m and earnings per share (EPS) of UK£0.034 in 2021. The forecasts seem more optimistic now, with a solid increase in revenue and a slight bump in earnings per share estimates.

Check out our latest analysis for SDI Group

With these upgrades, we're not surprised to see that the analyst has lifted their price target 14% to UK£1.25 per share.

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. It's clear from the latest estimates that SDI Group's rate of growth is expected to accelerate meaningfully, with the forecast 34% revenue growth noticeably faster than its historical growth of 25% 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 6.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that SDI Group is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also a nice increase in the price target, with the analyst apparently feeling that the intrinsic value of the business is improving. Given that the analyst appears to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at SDI Group.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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