Conifer Holdings, Inc. (NASDAQ:CNFR) 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. Conifer Holdings has also found favour with investors, with the stock up a noteworthy 16% to US$3.10 over the past week. Could this upgrade be enough to drive the stock even higher?
Following the upgrade, the latest consensus from Conifer Holdings' three analysts is for revenues of US$117m in 2021, which would reflect a reasonable 6.5% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to tumble 96% to US$0.02 in the same period. However, before this estimates update, the consensus had been expecting revenues of US$105m and US$0.80 per share in losses. So we can see that this has sparked a pretty clear upgrade to expectations, with higher revenues anticipated to lead to profit sooner than previously forecast.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 17% to US$3.50 per share.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Conifer Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 2.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.5% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Conifer Holdings to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that the consensus now expects Conifer Holdings to become profitable this year. They also upgraded their revenue estimates for this 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, Conifer Holdings could be worth investigating further.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Conifer Holdings analysts - going out to 2022, 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.
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