Bullish: Analysts Just Made A Meaningful Upgrade To Their Sensys Gatso Group AB (publ) (STO:SENS) Forecasts

Celebrations may be in order for Sensys Gatso Group AB (publ) (STO:SENS) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

After this upgrade, Sensys Gatso Group's dual analysts are now forecasting revenues of kr849m in 2021. This would be a huge 77% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 634% to kr0.11. Previously, the analysts had been modelling revenues of kr742m and earnings per share (EPS) of kr0.085 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for Sensys Gatso Group

It will come as no surprise to learn that the analysts have increased their price target for Sensys Gatso Group 12% to kr2.28 on the back of these upgrades. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Sensys Gatso Group analyst has a price target of kr2.30 per share, while the most pessimistic values it at kr2.25. This is a very narrow spread of estimates, implying either that Sensys Gatso Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sensys Gatso Group's past performance and to peers in the same industry. For example, we noticed that Sensys Gatso Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 77%, well above its historical decline of 0.004% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 7.7% per year. So it looks like Sensys Gatso Group is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for next year, expecting improving business conditions. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Sensys Gatso Group.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2023, 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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