Celebrations may be in order for TheWorks.co.uk plc (LON:WRKS) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. 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. TheWorks.co.uk has also found favour with investors, with the stock up a worthy 21% to UK£0.65 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.
Following the upgrade, the most recent consensus for TheWorks.co.uk from its dual analysts is for revenues of UK£247m in 2022 which, if met, would be a decent 19% increase on its sales over the past 12 months. Statutory earnings per share are presumed to jump 5,233% to UK£0.096. Before this latest update, the analysts had been forecasting revenues of UK£218m and earnings per share (EPS) of UK£0.078 in 2022. 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.
It will come as no surprise to learn that the analysts have increased their price target for TheWorks.co.uk 5.3% to UK£1.00 on the back of these upgrades.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that TheWorks.co.uk's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 19% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 3.0% a year over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.7% per year. So it looks like TheWorks.co.uk is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, TheWorks.co.uk could be worth investigating further.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for TheWorks.co.uk going out as far as 2024, 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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