Broker Revenue Forecasts For Seeka Limited (NZSE:SEK) Are Surging Higher

Shareholders in Seeka Limited (NZSE:SEK) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. The analyst has sharply increased their revenue numbers, with a view that Seeka will make substantially more sales than they'd previously expected.

After this upgrade, Seeka's one analyst is now forecasting revenues of NZ$377m in 2022. This would be a notable 13% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to nosedive 57% to NZ$0.17 in the same period. Prior to this update, the analyst had been forecasting revenues of NZ$339m and earnings per share (EPS) of NZ$0.17 in 2022. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.

See our latest analysis for Seeka

Even though revenue forecasts increased, the consensus price target fell 9.3% to NZ$4.40, perhaps suggesting that the analyst has become more pessimistic about the lack of earnings growth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of Seeka'shistorical trends, as the 13% annualised revenue growth to the end of 2022 is roughly in line with the 12% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 8.4% annually. So it's pretty clear that Seeka is forecast to grow substantially 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Seeka.

The covering analyst is definitely bullish on Seeka, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, 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 1 other warning sign 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.