Analysts' Revenue Estimates For Iren SpA (BIT:IRE) Are Surging Higher

Iren SpA (BIT:IRE) 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 analysts now much more optimistic on its sales pipeline.

After the upgrade, the consensus from Iren's five analysts is for revenues of €5.6b in 2022, which would reflect a measurable 5.3% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of €5.0b in 2022. The consensus has definitely become more optimistic, showing a decent improvement in revenue forecasts.

Check out our latest analysis for Iren

The consensus price target fell 7.1% to €2.90, with the analysts clearly less optimistic about Iren's valuation following this update. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Iren at €3.30 per share, while the most bearish prices it at €2.40. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Iren shareholders.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 10% by the end of 2022. This indicates a significant reduction from annual growth of 6.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.0% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Iren is expected to lag the wider industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Iren this year. They're also anticipating slower revenue growth than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Iren.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Iren that suggests the company could be somewhat undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

You can also see our analysis of Iren's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.