Ambienthesis S.p.A. (BIT:ATH) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance. The stock price has risen 5.5% to €1.16 over the past week, suggesting investors are becoming more optimistic. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
Following the upgrade, the current consensus from Ambienthesis' one analyst is for revenues of €166m in 2021 which - if met - would reflect a substantial 68% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 109% to €0.09. Prior to this update, the analyst had been forecasting revenues of €105m and earnings per share (EPS) of €0.041 in 2021. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.
It will come as no surprise to learn that the analyst has increased their price target for Ambienthesis 50% to €1.35 on the back of these upgrades.
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. It's clear from the latest estimates that Ambienthesis' rate of growth is expected to accelerate meaningfully, with the forecast 181% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 7.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Ambienthesis to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Ambienthesis could be worth investigating further.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, which can be seen 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.