Broker Revenue Forecasts For Huize Holding Limited (NASDAQ:HUIZ) Are Surging Higher

Shareholders in Huize Holding Limited (NASDAQ:HUIZ) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Huize Holding will make substantially more sales than they'd previously expected.

After this upgrade, Huize Holding's three analysts are now forecasting revenues of CN¥2.0b in 2021. This would be a decent 18% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing CN¥1.7b of revenue in 2021. It looks like there's been a clear increase in optimism around Huize Holding, given the solid increase in revenue forecasts.

View our latest analysis for Huize Holding

The consensus price target fell 22% to CN¥31.43, with the analysts clearly less optimistic about Huize Holding's valuation following this update. 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. Currently, the most bullish analyst values Huize Holding at CN¥10.06 per share, while the most bearish prices it at CN¥2.34. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

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. We would highlight that Huize Holding's revenue growth is expected to slow, with the forecast 18% annualised growth rate until the end of 2021 being well below the historical 38% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.1% annually. Even after the forecast slowdown in growth, it seems obvious that Huize Holding is also expected 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. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Huize Holding's future valuation. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Huize Holding.

It's great to see the analysts upgrading their estimates, but the biggest highlight to us is that the business is expected to become profitable in the foreseeable future. You can learn more about these forecasts, for 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.