News Flash: Analysts Just Made A Meaningful Upgrade To Their Shift Technologies, Inc. (NASDAQ:SFT) Forecasts

Shift Technologies, Inc. (NASDAQ:SFT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the upgrade, the latest consensus from Shift Technologies' seven analysts is for revenues of US$445m in 2021, which would reflect a huge 197% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 23% to US$1.68. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$393m and losses of US$1.40 per share in 2021. Ergo, there's been a clear change in sentiment, with the analysts lifting this year's revenue estimates, while at the same time increasing their loss per share forecasts to reflect the cost of achieving this growth.

View our latest analysis for Shift Technologies

Spiting the revenue upgrading, The consensus price target fell 12% to US$12.33, clearly signalling that higher forecast losses are a valuation concern. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Shift Technologies analyst has a price target of US$20.00 per share, while the most pessimistic values it at US$7.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Shift Technologies' growth to accelerate, with the forecast 197% annualised growth to the end of 2021 ranking favourably alongside historical growth of 13% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Shift Technologies is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Shift Technologies.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Shift Technologies 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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This article by Simply Wall St is general in nature. 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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