One Analyst's Revenue Estimates For Zaptec AS (OB:ZAP) Are Surging Higher

Celebrations may be in order for Zaptec AS (OB:ZAP) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The analyst has sharply increased their revenue numbers, with a view that Zaptec will make substantially more sales than they'd previously expected. The stock price has risen 7.2% to kr41.54 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 most recent consensus for Zaptec from its solo analyst is for revenues of kr1.6b in 2023 which, if met, would be a major 115% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analyst forecasting kr1.39 in per-share earnings. Before this latest update, the analyst had been forecasting revenues of kr1.2b and earnings per share (EPS) of kr1.39 in 2023. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

Check out our latest analysis for Zaptec

The consensus price target increased 25% to kr50.00, with an improved revenue forecast carrying the promise of a more valuable business, in time.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Zaptec's past performance and to peers in the same industry. The analyst is definitely expecting Zaptec's growth to accelerate, with the forecast 115% annualised growth to the end of 2023 ranking favourably alongside historical growth of 54% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.4% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Zaptec 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 the analyst reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given that the analyst appears to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Zaptec.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential concerns with Zaptec, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 2 other concerns we've identified .

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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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.