Party Time: One Broker Just Made Major Increases To Their REC Silicon ASA (OB:RECSI) Earnings Forecast

Shareholders in REC Silicon ASA (OB:RECSI) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance.

Following the upgrade, the most recent consensus for REC Silicon from its solo analyst is for revenues of US$196m in 2022 which, if met, would be a huge 44% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 80% to US$0.028. However, before this estimates update, the consensus had been expecting revenues of US$166m and US$0.044 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

View our latest analysis for REC Silicon

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the REC Silicon's past performance and to peers in the same industry. One thing stands out from these estimates, which is that REC Silicon is forecast to grow faster in the future than it has in the past, with revenues expected to display 34% annualised growth until the end of 2022. If achieved, this would be a much better result than the 19% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 11% annually. Not only are REC Silicon's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting REC Silicon is moving incrementally towards profitability. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. More bullish expectations could be a signal for investors to take a closer look at REC Silicon.

That's a pretty serious upgrade, but shareholders might be even more pleased to know that forecasts expect REC Silicon to be able to reach break-even within the next few years. For more information, you can click through to our free platform to learn more about these forecasts.

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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.