Broker Revenue Forecasts For Gulf International Services Q.P.S.C. (DSM:GISS) Are Surging Higher

Shareholders in Gulf International Services Q.P.S.C. (DSM:GISS) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The stock price has risen 7.3% to ر.ق1.80 over the past week, suggesting investors are becoming more optimistic. Could this big upgrade push the stock even higher?

Following the upgrade, the latest consensus from Gulf International Services Q.P.S.C's sole analyst is for revenues of ر.ق4.1b in 2023, which would reflect a meaningful 12% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 41% to ر.ق0.22. Before this latest update, the analyst had been forecasting revenues of ر.ق3.7b and earnings per share (EPS) of ر.ق0.21 in 2023. The most recent forecasts are noticeably more optimistic, with a substantial gain in revenue estimates and a lift to earnings per share as well.

See our latest analysis for Gulf International Services Q.P.S.C

Despite these upgrades, the analyst has not made any major changes to their price target of ر.ق2.08, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Gulf International Services Q.P.S.C analyst has a price target of ر.ق2.10 per share, while the most pessimistic values it at ر.ق2.06. This is a very narrow spread of estimates, implying either that Gulf International Services Q.P.S.C is an easy company to value, or - more likely - the analyst is relying heavily on some key assumptions.

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. It's clear from the latest estimates that Gulf International Services Q.P.S.C's rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 7.1% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Gulf International Services Q.P.S.C is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue forecasts, although the latest estimates suggest that Gulf International Services Q.P.S.C will grow in line with the overall market. Given that the analyst appears to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Gulf International Services Q.P.S.C.

Better yet, our automated discounted cash flow calculation (DCF) suggests Gulf International Services Q.P.S.C could be moderately undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

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.