Analysts Just Shipped A Captivating Upgrade To Their SCI Pharmtech, Inc. (TPE:4119) Estimates

SCI Pharmtech, Inc. (TPE:4119) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

After the upgrade, the consensus from SCI Pharmtech's three analysts is for revenues of NT$742m in 2021, which would reflect a concerning 72% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to crater 74% to NT$1.18 in the same period. Previously, the analysts had been modelling revenues of NT$609m and earnings per share (EPS) of NT$0.56 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for SCI Pharmtech

With these upgrades, we're not surprised to see that the analysts have lifted their price target 11% to NT$89.33 per share. 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. There are some variant perceptions on SCI Pharmtech, with the most bullish analyst valuing it at NT$95.00 and the most bearish at NT$82.00 per share. This is a very narrow spread of estimates, implying either that SCI Pharmtech is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. We would highlight that sales are expected to reverse, with a forecast 72% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 10% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. It's pretty clear that SCI Pharmtech's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at SCI Pharmtech.

Analysts are clearly in love with SCI Pharmtech at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as its declining profit margins. For more information, you can click through to our platform to learn more about this and the 3 other flags we've identified .

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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