Need To Know: One Analyst Is Much More Bullish On W5 Solutions AB (publ) (STO:W5) Revenues

Celebrations may be in order for W5 Solutions AB (publ) (STO:W5) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The analyst has sharply increased their revenue numbers, with a view that W5 Solutions will make substantially more sales than they'd previously expected. The stock price has risen 6.9% to kr72.00 over the past week, suggesting investors are becoming more optimistic. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the current consensus from W5 Solutions' lone analyst is for revenues of kr308m in 2023 which - if met - would reflect a substantial 73% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 113% to kr2.20. Prior to this update, the analyst had been forecasting revenues of kr244m and earnings per share (EPS) of kr2.10 in 2023. The forecasts seem more optimistic now, with a sizeable gain to revenue and a modest lift to earnings per share estimates.

Check out our latest analysis for W5 Solutions

With these upgrades, we're not surprised to see that the analyst has lifted their price target 23% to kr86.00 per share.

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 W5 Solutions' rate of growth is expected to accelerate meaningfully, with the forecast 73% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 30% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that W5 Solutions is expected to grow much faster than its 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 estimates for this year, and sales are expected to grow faster than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. 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 W5 Solutions.

The covering analyst is definitely bullish on W5 Solutions, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 3 other risks 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.