Celebrations may be in order for Delta Apparel, Inc. (NYSEMKT:DLA) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with the analyst now much more optimistic on its sales pipeline.
Following the latest upgrade, the current consensus, from the single analyst covering Delta Apparel, is for revenues of US$358m in 2020, which would reflect a not inconsiderable 15% reduction in Delta Apparel’s sales over the past 12 months. Before the latest update, the analyst was foreseeing US$322m of revenue in 2020. It looks like there’s been a clear increase in optimism around Delta Apparel, given the substantial gain in revenue forecasts.
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. Over the past five years, revenues have declined around 1.7% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for a 15% decline in revenue next year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 8.7% per year. So it’s pretty clear that, while it does have declining revenues, the analyst also expect Delta Apparel to suffer worse than the wider industry.
The Bottom Line
The highlight for us was that the analyst increased their revenue forecasts for Delta Apparel this year. They also expect company revenue to perform worse than the wider market. Seeing the dramatic upgrade to this year’s forecasts, it might be time to take another look at Delta Apparel.
Unanswered questions? One Delta Apparel broker/analyst has provided estimates out to 2021, 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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