Growth Investors: Industry Analysts Just Upgraded Their Pegavision Corporation (TPE:6491) Revenue Forecasts By 17%

Celebrations may be in order for Pegavision Corporation (TPE:6491) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The market seems to be pricing in some improvement in the business too, with the stock up 8.8% over the past week, closing at NT$392. Could this big upgrade push the stock even higher?

Following the upgrade, the current consensus from Pegavision's dual analysts is for revenues of NT$5.5b in 2021 which - if met - would reflect a sizeable 39% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of NT$4.7b in 2021. It looks like there's been a clear increase in optimism around Pegavision, given the substantial gain in revenue forecasts.

See our latest analysis for Pegavision

Additionally, the consensus price target for Pegavision increased 9.3% to NT$390, showing a clear increase in optimism from the analysts involved. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Pegavision analyst has a price target of NT$450 per share, while the most pessimistic values it at NT$330. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Pegavision shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Pegavision's past performance and to peers in the same industry. The analysts are definitely expecting Pegavision's growth to accelerate, with the forecast 39% annualised growth to the end of 2021 ranking favourably alongside historical growth of 21% 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 15% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Pegavision to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. The analysts also expect revenues to grow faster than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Pegavision.

Looking to learn more? We have analyst estimates for Pegavision going out to 2023, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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