Celebrations may be in order for Destini Berhad (KLSE:DESTINI) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. 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 Destini Berhad from its lone analyst is for revenues of RM255m in 2021 which, if met, would be a sizeable 86% increase on its sales over the past 12 months. Yet before this consensus update, the analyst had been forecasting revenues of RM171m and losses of RM0.01 per share in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
The consensus price target rose 20% to RM0.06, with the analyst clearly more optimistic about Destini Berhad's prospects following this update.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Destini Berhad's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Destini Berhad is forecast to grow faster in the future than it has in the past, with revenues expected to display 86% annualised growth until the end of 2021. If achieved, this would be a much better result than the 11% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 18% per year. So it looks like Destini Berhad is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away from this upgrade is that there is now an expectation for Destini Berhad to become profitable this year, compared to previous expectations of a loss. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. There was also a nice increase in the price target, with the analyst 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 Destini Berhad.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential concerns with Destini Berhad, including dilutive stock issuance over the past year. You can learn more, and discover the 3 other concerns we've identified, for 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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