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Industry Analysts Just Upgraded Their Topps Tiles Plc (LON:TPT) Revenue Forecasts By 17%

Simply Wall St
·3 min read

Topps Tiles Plc (LON:TPT) shareholders will have a reason to smile today, with the analysts 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 seems to be pricing in some improvement in the business too, with the stock up 4.9% over the past week, closing at UK£0.40. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the consensus from three analysts covering Topps Tiles is for revenues of UK£188m in 2020, implying a not inconsiderable 13% decline in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of UK£160m in 2020. It looks like there's been a clear increase in optimism around Topps Tiles, given the nice increase in revenue forecasts.

Check out our latest analysis for Topps Tiles

LSE:TPT Past and Future Earnings June 2nd 2020
LSE:TPT Past and Future Earnings June 2nd 2020

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. We would highlight that sales are expected to reverse, with the forecast 13% revenue decline a notable change from historical growth of 0.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Topps Tiles is expected to lag the wider industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Topps Tiles this year. They also expect company revenue to perform worse than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Topps Tiles.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential warning signs with Topps Tiles, including its declining profit margins. For more information, you can click through to our platform to learn more about this and the 3 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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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. Thank you for reading.