Analysts Are Betting On Sinch AB (publ) (STO:SINCH) With A Big Upgrade This Week

Shareholders in Sinch AB (publ) (STO:SINCH) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The revenue forecast for next year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. Sinch has also found favour with investors, with the stock up a worthy 21% to kr968 over the past week. Could this upgrade be enough to drive the stock even higher?

After this upgrade, Sinch's three analysts are now forecasting revenues of kr13b in 2021. This would be a major 99% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing kr11b of revenue in 2021. It looks like there's been a clear increase in optimism around Sinch, given the considerable lift to revenue forecasts.

View our latest analysis for Sinch

Additionally, the consensus price target for Sinch increased 9.4% to kr967, showing a clear increase in optimism from the analysts involved. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Sinch, with the most bullish analyst valuing it at kr1,100 and the most bearish at kr760 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Sinch's growth to accelerate, with the forecast 99% growth ranking favourably alongside historical growth of 33% per annum 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 21% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Sinch is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for next year. They're also forecasting more rapid revenue growth 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 analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Sinch.

Looking to learn more? At least one of Sinch's three analysts has provided estimates out to 2024, which can be seen for 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.

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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.
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