Upgrade: Analysts Just Made A Meaningful Increase To Their Kahoot! AS (OB:KAHOT) Forecasts

Shareholders in Kahoot! AS (OB:KAHOT) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. 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.

Following the upgrade, the most recent consensus for Kahoot! from its twin analysts is for revenues of kr703m in 2021 which, if met, would be a major increase on its sales over the past 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of kr0.095 per share next year. Yet before this consensus update, the analysts had been forecasting revenues of kr600m and losses of kr0.11 per share in 2021. It looks like there's been a definite improvement in business conditions, with a revenue upgrade supposed to lead to profitability sooner than previously forecast.

View our latest analysis for Kahoot!

With these upgrades, we're not surprised to see that the analysts have lifted their price target 43% to US$77.41 per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Kahoot!, with the most bullish analyst valuing it at US$1,201 and the most bearish at US$120 per share. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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. The analysts are definitely expecting Kahoot!'s growth to accelerate, with the forecast 5x growth ranking favourably alongside historical growth of 301% per annum over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Kahoot! to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that there is now an expectation for Kahoot! to become profitable next year, compared to previous expectations of a loss. Fortunately, analysts 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, Kahoot! could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Kahoot! going out as far as 2025, and you can see them 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.

When trading Kahoot! or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.