New Forecasts: Here's What Analysts Think The Future Holds For Magic Software Enterprises Ltd. (NASDAQ:MGIC)
Celebrations may be in order for Magic Software Enterprises Ltd. (NASDAQ:MGIC) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The market may be pricing in some blue sky too, with the share price gaining 13% to US$11.81 in the last 7 days. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.
Following this upgrade, Magic Software Enterprises' solo analyst are forecasting 2024 revenues to be US$540m, approximately in line with the last 12 months. Statutory earnings per share are expected to be US$0.75, roughly flat on the last 12 months. Prior to this update, the analyst had been forecasting revenues of US$474m and earnings per share (EPS) of US$0.61 in 2024. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.
View our latest analysis for Magic Software Enterprises
It will come as no surprise to learn that the analyst has increased their price target for Magic Software Enterprises 7.7% to US$14.00 on the back of these upgrades.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Magic Software Enterprises' past performance and to peers in the same industry. We would highlight that Magic Software Enterprises' revenue growth is expected to slow, with the forecast 0.9% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. Factoring in the forecast slowdown in growth, it seems obvious that Magic Software Enterprises is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for this year. Pleasantly, the analyst also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Magic Software Enterprises.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Magic Software Enterprises going out as far as 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. 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.
