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Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.
After the upgrade, the seven analysts covering Grid Dynamics Holdings are now predicting revenues of US$190m in 2021. If met, this would reflect a huge 33% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 75% to US$0.045. However, before this estimates update, the consensus had been expecting revenues of US$171m and US$0.088 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Grid Dynamics Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 76% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 21% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Grid Dynamics Holdings to grow faster than the wider industry.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Grid Dynamics Holdings' prospects. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. More bullish expectations could be a signal for investors to take a closer look at Grid Dynamics Holdings.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Grid Dynamics Holdings going out to 2023, 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.
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.
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