Celebrations may be in order for Gladstone Commercial Corporation (NASDAQ:GOOD) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. Gladstone Commercial has also found favour with investors, with the stock up a noteworthy 22% to US$16.93 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
Following the upgrade, the most recent consensus for Gladstone Commercial from its six analysts is for revenues of US$136m in 2020 which, if met, would be a notable 13% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$123m in 2020. It looks like there's been a clear increase in optimism around Gladstone Commercial, given the nice increase in revenue forecasts.
We'd point out that there was no major changes to their price target of US$20.40, suggesting the latest estimates were not enough to shift their view on the value of the business. 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 Gladstone Commercial, with the most bullish analyst valuing it at US$26.00 and the most bearish at US$18.00 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. It's clear from the latest estimates that Gladstone Commercial's rate of growth is expected to accelerate meaningfully, with the forecast 13% revenue growth noticeably faster than its historical growth of 8.6% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Gladstone Commercial to grow faster than the wider industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Gladstone Commercial this year. They're also forecasting more rapid revenue growth than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Gladstone Commercial.
Analysts are definitely bullish on Gladstone Commercial, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 4 other warning signs we've identified .
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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