The Ambac Financial Group, Inc. (NYSE:AMBC) Analyst Just Boosted Their Forecasts By A Meaningful Amount

Ambac Financial Group, Inc. (NYSE:AMBC) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's statutory forecasts. The analyst greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the most recent consensus for Ambac Financial Group from its lone analyst is for revenues of US$213m in 2021 which, if met, would be a huge 28% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 72% to US$2.67. Yet before this consensus update, the analyst had been forecasting revenues of US$193m and losses of US$3.17 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

Check out our latest analysis for Ambac Financial Group

It will come as no surprise to learn that the analyst has increased their price target for Ambac Financial Group 21% to US$17.00 on the back of these upgrades.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Ambac Financial Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 28% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 19% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 3.2% per year. So it looks like Ambac Financial Group is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing here is that the analyst reduced their loss per share estimates for this year, reflecting increased optimism around Ambac Financial Group's prospects. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Ambac Financial Group.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2022, 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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