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 consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.
After this upgrade, Zaptec's sole analyst is now forecasting revenues of kr352m in 2021. This would be a major 60% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to sink 14% to kr0.45 in the same period. Prior to this update, the analyst had been forecasting revenues of kr289m and earnings per share (EPS) of kr0.34 in 2021. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.
With these upgrades, we're not surprised to see that the analyst has lifted their price target 150% to kr75.00 per share.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Zaptec's rate of growth is expected to accelerate meaningfully, with the forecast 60% revenue growth noticeably faster than its historical growth of 40% over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.8% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Zaptec 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, Zaptec 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 2025, which can be seen 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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