CLS Holdings plc (LON:CLI) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that CLS Holdings will make substantially more sales than they'd previously expected.
After the upgrade, the consensus from CLS Holdings' dual analysts is for revenues of UK£130m in 2021, which would reflect a measurable 6.4% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of UK£113m in 2021. It looks like there's been a clear increase in optimism around CLS Holdings, given the substantial gain in revenue forecasts.
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. We would highlight that sales are expected to reverse, with a forecast 6.4% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 3.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 0.4% annually for the foreseeable future. It's pretty clear that CLS Holdings' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for CLS Holdings this year. They're also anticipating slower revenue growth than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at CLS Holdings.
Analysts are clearly in love with CLS Holdings at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as its declining profit margins. For more information, you can click through to our platform to learn more about this and the 3 other warning signs we've identified .
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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