Celebrations may be in order for Ten Square Games S.A. (WSE:TEN) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.
Following the upgrade, the latest consensus from Ten Square Games' seven analysts is for revenues of zł631m in 2020, which would reflect a substantial 54% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 61% to zł25.27. Before this latest update, the analysts had been forecasting revenues of zł545m and earnings per share (EPS) of zł24.45 in 2020. The forecasts seem more optimistic now, with a decent improvement in revenue and a small increase to earnings per share estimates.
It will come as no surprise to learn that the analysts have increased their price target for Ten Square Games 10% to zł644 on the back of these upgrades. 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 Ten Square Games, with the most bullish analyst valuing it at zł774 and the most bearish at zł505 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ten Square Games' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Ten Square Games' revenue growth will slow down substantially, with revenues next year expected to grow 54%, compared to a historical growth rate of 138% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.4% next year. So it's pretty clear that, while Ten Square Games' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Ten Square Games.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Ten Square Games analysts - going out to 2024, 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.
If you decide to trade Ten Square Games, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account.
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 firstname.lastname@example.org.