New Forecasts: Here's What Analysts Think The Future Holds For ContourGlobal plc (LON:GLO)
ContourGlobal plc (LON:GLO) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that ContourGlobal will make substantially more sales than they'd previously expected. The stock price has risen 7.4% to UK£2.00 over the past week, suggesting investors are becoming more optimistic. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
After the upgrade, the consensus from ContourGlobal's three analysts is for revenues of US$1.9b in 2022, which would reflect a considerable 13% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of US$1.7b in 2022. The consensus has definitely become more optimistic, showing a solid increase in revenue forecasts.
View our latest analysis for ContourGlobal
There was no particular change to the consensus price target of US$3.20, with ContourGlobal's latest outlook seemingly not enough to result in a change of valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on ContourGlobal, with the most bullish analyst valuing it at US$3.05 and the most bearish at US$2.08 per share. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 13% by the end of 2022. This indicates a significant reduction from annual growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - ContourGlobal is expected to lag the wider industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for ContourGlobal this year. They also expect company revenue to perform worse 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 ContourGlobal.
Looking for more information? We have analyst estimates for ContourGlobal going out to 2024, and you can see them free on our platform here.
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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.
