One Analyst's Earnings Estimates For Catena Media plc (STO:CTM) Are Surging Higher

Celebrations may be in order for Catena Media plc (STO:CTM) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance. The stock price has risen 6.8% to kr64.62 over the past week, suggesting investors are becoming more optimistic. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the latest consensus from Catena Media's solitary analyst is for revenues of €151m in 2021, which would reflect a sizeable 26% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 74% to €0.56. Previously, the analyst had been modelling revenues of €120m and earnings per share (EPS) of €0.36 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for Catena Media

It will come as no surprise to learn that the analyst has increased their price target for Catena Media 63% to €6.91 on the back of these upgrades.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Catena Media's rate of growth is expected to accelerate meaningfully, with the forecast 36% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 24% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 19% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Catena Media is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Catena Media could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Catena Media going out as far as 2023, 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’re looking to trade Catena Media, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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 editorial-team (at) simplywallst.com.