Growth Investors: Industry Analysts Just Upgraded Their Telecom Plus Plc (LON:TEP) Revenue Forecasts By 17%

Telecom Plus Plc (LON:TEP) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Telecom Plus will make substantially more sales than they'd previously expected. Telecom Plus has also found favour with investors, with the stock up a remarkable 23% to UK£21.40 over the past week. Could this upgrade be enough to drive the stock even higher?

After the upgrade, the three analysts covering Telecom Plus are now predicting revenues of UK£2.1b in 2023. If met, this would reflect a sizeable 121% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of UK£1.8b in 2023. It looks like there's been a clear increase in optimism around Telecom Plus, given the substantial gain in revenue forecasts.

See our latest analysis for Telecom Plus

Additionally, the consensus price target for Telecom Plus increased 17% to UK£26.00, showing a clear increase in optimism from the analysts involved. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Telecom Plus, with the most bullish analyst valuing it at UK£24.80 and the most bearish at UK£19.50 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Telecom Plus is an easy business to forecast or the underlying assumptions are obvious.

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. The analysts are definitely expecting Telecom Plus' growth to accelerate, with the forecast 121% annualised growth to the end of 2023 ranking favourably alongside historical growth of 4.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.5% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Telecom Plus is expected to grow much faster than its 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 Telecom Plus.

Need some more information? At least one of Telecom Plus' three analysts has provided estimates out to 2025, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.