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Ideanomics, Inc. (NASDAQ:IDEX) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance. The market seems to be pricing in some improvement in the business too, with the stock up 9.7% over the past week, closing at US$2.83. Could this big upgrade push the stock even higher?
Following the upgrade, the current consensus from Ideanomics' sole analyst is for revenues of US$129m in 2021 which - if met - would reflect a substantial 119% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 84% to US$0.05. However, before this estimates update, the consensus had been expecting revenues of US$105m and US$0.11 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analyst administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.
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. For example, we noticed that Ideanomics' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 184% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 2.6% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 13% annually. So it looks like Ideanomics is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Ideanomics is moving incrementally towards profitability. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations, it might be time to take another look at Ideanomics.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential warning sign with Ideanomics, including 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 1 other warning sign we've identified .
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.
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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