Intrepid Potash, Inc. (NYSE:IPI) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.
Following the upgrade, the most recent consensus for Intrepid Potash from its four analysts is for revenues of US$207m in 2021 which, if met, would be a huge 38% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$185m of revenue in 2021. It looks like there's been a clear increase in optimism around Intrepid Potash, given the decent improvement in revenue forecasts.
The consensus price target rose 27% to US$19.00, with the analysts clearly more optimistic about Intrepid Potash's prospects following this update. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Intrepid Potash at US$21.00 per share, while the most bearish prices it at US$11.00. 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.
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. For example, we noticed that Intrepid Potash's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 38% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 3.1% 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 6.1% per year. Not only are Intrepid Potash's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Intrepid Potash this year. They're also forecasting more rapid revenue growth than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Intrepid Potash.
That's a pretty serious upgrade, but shareholders might be even more pleased to know that forecasts expect Intrepid Potash to be able to reach break-even within the next few years. You can learn more about these forecasts, 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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