Need To Know: One Analyst Is Much More Bullish On Yü Group PLC (LON:YU.) Revenues

Yü Group PLC (LON:YU.) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. Investors have been pretty optimistic on Yü Group too, with the stock up 80% to UK£2.12 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the latest upgrade, Yü Group's one analyst currently expects revenues in 2020 to be UK£100m, approximately in line with the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 41% to UK£0.14. Yet before this consensus update, the analyst had been forecasting revenues of UK£91m and losses of UK£0.16 per share in 2020. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

Check out our latest analysis for Yü Group

There was no major change to the consensus price target of €2.34, perhaps suggesting that the analyst remain concerned about ongoing losses despite the improved earnings and revenue outlook.

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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 1.1%, a significant reduction from annual growth of 37% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.7% next year. It's pretty clear that Yü Group's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing here is that the analyst reduced their loss per share estimates for this year, reflecting increased optimism around Yü Group's prospects. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. 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 Yü Group.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2022, which can be seen for 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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