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The Supreme Cannabis Company, Inc. (TSE:FIRE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that Supreme Cannabis Company will make substantially more sales than they'd previously expected.
After the upgrade, the three analysts covering Supreme Cannabis Company are now predicting revenues of CA$65m in 2021. If met, this would reflect a substantial 32% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing CA$57m of revenue in 2021. The consensus has definitely become more optimistic, showing a decent improvement in revenue forecasts.
The consensus price target rose 83% to CA$0.41, with the analysts clearly more optimistic about Supreme Cannabis Company's prospects following this update. 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 Supreme Cannabis Company, with the most bullish analyst valuing it at CA$0.55 and the most bearish at CA$0.30 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Supreme Cannabis Company's rate of growth is expected to accelerate meaningfully, with the forecast 74% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 56% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 34% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Supreme Cannabis Company to grow faster than the wider industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Supreme Cannabis Company this year. The analysts also expect revenues to grow faster 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 Supreme Cannabis Company.
Analysts are clearly in love with Supreme Cannabis Company at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as major dilution from new stock issuance in the past year. For more information, you can click through to our platform to learn more about this and the 2 other concerns 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.
This article by Simply Wall St is general in nature. 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.
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