Shareholders in PowerCell Sweden AB (publ) (STO:PCELL) 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 PowerCell Sweden will make substantially more sales than they'd previously expected.
Following the upgrade, the most recent consensus for PowerCell Sweden from its dual analysts is for revenues of kr117m in 2020 which, if met, would be a sizeable 75% increase on its sales over the past 12 months. Following this this upgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of kr1.44 per share in 2020. Yet before this consensus update, the analysts had been forecasting revenues of kr106m and losses of kr1.55 per share in 2020. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.
The consensus price target rose 14% to kr220, with the analysts encouraged by the higher revenue and lower forecast losses for this year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on PowerCell Sweden, with the most bullish analyst valuing it at kr225 and the most bearish at kr215 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.
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. The analysts are definitely expecting PowerCell Sweden's growth to accelerate, with the forecast 75% growth ranking favourably alongside historical growth of 54% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 30% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that PowerCell Sweden is expected to grow much faster than its 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 PowerCell Sweden'sprospects. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better 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 PowerCell Sweden.
Analysts are clearly in love with PowerCell Sweden at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as concerns around earnings quality. You can learn more, and discover the 1 other warning sign we've identified, 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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