Shareholders in Global Medical REIT Inc. (NYSE:GMRE) 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 Global Medical REIT will make substantially more sales than they'd previously expected.
After the upgrade, the six analysts covering Global Medical REIT are now predicting revenues of US$120m in 2021. If met, this would reflect a huge 21% improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of US$0.31 per share this year. Prior to this update, the analysts had been forecasting revenues of US$109m and earnings per share (EPS) of US$0.26 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
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 Global Medical REIT's revenue growth is expected to slow, with the forecast 29% annualised growth rate until the end of 2021 being well below the historical 44% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.4% per year. Even after the forecast slowdown in growth, it seems obvious that Global Medical REIT 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 upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Global Medical REIT.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Global Medical REIT analysts - 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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