Party Time: Brokers Just Made Major Increases To Their Patria Investments Limited (NASDAQ:PAX) Earnings Forecasts

Shareholders in Patria Investments Limited (NASDAQ:PAX) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

After the upgrade, the five analysts covering Patria Investments are now predicting revenues of US$376m in 2023. If met, this would reflect a major 25% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 60% to US$1.21. Before this latest update, the analysts had been forecasting revenues of US$330m and earnings per share (EPS) of US$1.03 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.

Check out our latest analysis for Patria Investments

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$19.08, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Patria Investments at US$21.50 per share, while the most bearish prices it at US$15.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Patria Investments' past performance and to peers in the same industry. The analysts are definitely expecting Patria Investments' growth to accelerate, with the forecast 56% annualised growth to the end of 2023 ranking favourably alongside historical growth of 29% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Patria Investments is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Patria Investments could be a good candidate for more research.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Patria Investments going out to 2025, and you can see them 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.