New Forecasts: Here's What One Analyst Thinks The Future Holds For Micro-X Limited (ASX:MX1)
Micro-X Limited (ASX:MX1) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now 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 23% to AU$0.16 in the last 7 days. 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 Micro-X from its lone analyst is for revenues of AU$3.2m in 2020 which, if met, would be a sizeable 75% increase on its sales over the past 12 months. Prior to the latest estimates, the analyst was forecasting revenues of AU$2.3m in 2020. It looks like there's been a clear increase in optimism around Micro-X, given the sizeable gain to revenue forecasts.
Check out our latest analysis for Micro-X
The consensus price target fell 9.8% to AU$0.37, with the analyst clearly less optimistic about Micro-X's valuation following this update.
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. The analyst is definitely expecting Micro-X'sgrowth to accelerate, with the forecast 75% growth ranking favourably alongside historical growth of 31% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Micro-X to grow faster than the wider industry.
The Bottom Line
The highlight for us was that the analyst increased their revenue forecasts for Micro-X this year. They're also forecasting more rapid revenue growth than the wider market. The consensus price target fell measurably, with the analyst seemingly not reassured by recent business developments, leading to a lower estimate of Micro-X's future valuation. Given that the analyst appears to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Micro-X.
Unanswered questions? One Micro-X broker/analyst has provided estimates out to 2022, which can be seen 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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