JBM Auto Limited (NSE:JBMA) 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.
Following the upgrade, the most recent consensus for JBM Auto from its single analyst is for revenues of ₹30b in 2022 which, if met, would be a solid 12% increase on its sales over the past 12 months. Prior to the latest estimates, the analyst was forecasting revenues of ₹26b in 2022. It looks like there's been a clear increase in optimism around JBM Auto, given the decent improvement in revenue forecasts.
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. It's clear from the latest estimates that JBM Auto's rate of growth is expected to accelerate meaningfully, with the forecast 26% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 4.9% 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 13% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect JBM Auto to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that the analyst lifted their revenue estimates for this year. The analyst also expects revenues to grow faster than the wider market. More bullish expectations could be a signal for investors to take a closer look at JBM Auto.
The covering analyst is clearly in love with JBM Auto at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as concerns around earnings quality. You can learn more, and discover the 1 other flag we've identified, for 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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.