Bullish: This Analyst Just Lifted Their Waystream Holding AB (publ) (STO:WAYS) Outlook For Next Year

Waystream Holding AB (publ) (STO:WAYS) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to next year's statutory forecasts. The analyst greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market seems to be pricing in some improvement in the business too, with the stock up 7.6% over the past week, closing at kr73.20. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the most recent consensus for Waystream Holding from its solo analyst is for revenues of kr185m in 2023 which, if met, would be a sizeable 48% increase on its sales over the past 12 months. Statutory earnings per share are presumed to soar 82% to kr3.90. Before this latest update, the analyst had been forecasting revenues of kr146m and earnings per share (EPS) of kr3.50 in 2023. 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.

See our latest analysis for Waystream Holding

With these upgrades, we're not surprised to see that the analyst has lifted their price target 122% to kr100.00 per share.

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 Waystream Holding's rate of growth is expected to accelerate meaningfully, with the forecast 37% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 6.9% 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 3.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Waystream Holding 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 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. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Waystream Holding could be worth investigating further.

The covering analyst is clearly in love with Waystream Holding at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as concerns around earnings quality. You can learn more, and discover the 2 other risks we've identified, 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. 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.