New Forecasts: Here's What Analysts Think The Future Holds For Vobile Group Limited (HKG:3738)

Vobile Group Limited (HKG:3738) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.

Following the upgrade, the most recent consensus for Vobile Group from its four analysts is for revenues of HK$1.3b in 2022 which, if met, would be a substantial 93% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting HK$0.046 in per-share earnings. Previously, the analysts had been modelling revenues of HK$1.0b and earnings per share (EPS) of HK$0.046 in 2022. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.

Check out our latest analysis for Vobile Group

It may not be a surprise to see that the analysts have reconfirmed their price target of US$1.41, implying that the uplift in sales is not expected to greatly contribute to Vobile Group's valuation in the near term. 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. Currently, the most bullish analyst values Vobile Group at US$19.35 per share, while the most bearish prices it at US$7.00. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. 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 Vobile Group's rate of growth is expected to accelerate meaningfully, with the forecast 93% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 39% 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 26% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Vobile Group is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Vobile Group.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Vobile Group analysts - going out to 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.