Industry Analysts Just Made A Notable Upgrade To Their Ever Sunshine Lifestyle Services Group Limited (HKG:1995) Revenue Forecasts
Ever Sunshine Lifestyle Services Group Limited (HKG:1995) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. Investors have been pretty optimistic on Ever Sunshine Lifestyle Services Group too, with the stock up 21% to CN¥9.79 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.
After this upgrade, Ever Sunshine Lifestyle Services Group's 13 analysts are now forecasting revenues of CN¥3.0b in 2020. This would be a huge 57% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 55% to CN¥0.23. Before this latest update, the analysts had been forecasting revenues of CN¥2.7b and earnings per share (EPS) of CN¥0.21 in 2020. The forecasts seem more optimistic now, with a nice gain to revenue and a small increase to earnings per share estimates.
See our latest analysis for Ever Sunshine Lifestyle Services Group
It will come as no surprise to learn that the analysts have increased their price target for Ever Sunshine Lifestyle Services Group 12% to CN¥8.61 on the back of these upgrades. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Ever Sunshine Lifestyle Services Group, with the most bullish analyst valuing it at CN¥10.57 and the most bearish at CN¥4.04 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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 Ever Sunshine Lifestyle Services Group's rate of growth is expected to accelerate meaningfully, with the forecast 57% revenue growth noticeably faster than its historical growth of 41% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 22% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Ever Sunshine Lifestyle Services Group to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better 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. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Ever Sunshine Lifestyle Services Group.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Ever Sunshine Lifestyle Services Group going out to 2022, 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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