News Flash: Analysts Just Made A Captivating Upgrade To Their Mobvista Inc. (HKG:1860) Forecasts

Celebrations may be in order for Mobvista Inc. (HKG:1860) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Mobvista will make substantially more sales than they'd previously expected. The market may be pricing in some blue sky too, with the share price gaining 15% to HK$8.64 in the last 7 days. 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 Mobvista from its twin analysts is for revenues of US$666m in 2021 which, if met, would be a huge 29% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$569m of revenue in 2021. It looks like there's been a clear increase in optimism around Mobvista, given the substantial gain in revenue forecasts.

View our latest analysis for Mobvista

The consensus price target rose 8.6% to US$1.33, with the analysts clearly more optimistic about Mobvista's prospects following this update. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Mobvista analyst has a price target of US$11.09 per share, while the most pessimistic values it at US$9.46. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Mobvista's rate of growth is expected to accelerate meaningfully, with the forecast 29% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 19% 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 18% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Mobvista to grow faster than the wider 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. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Mobvista.

Still got questions? We have analyst estimates for Mobvista going out to 2023, 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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