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Gran Colombia Gold Corp. (TSE:GCM) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.
After this upgrade, Gran Colombia Gold's three analysts are now forecasting revenues of US$437m in 2021. This would be a notable 11% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$389m of revenue in 2021. It looks like there's been a clear increase in optimism around Gran Colombia Gold, given the substantial gain in revenue forecasts.
We'd point out that there was no major changes to their price target of US$9.53, suggesting the latest estimates were not enough to shift their view on the value of the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Gran Colombia Gold analyst has a price target of US$17.36 per share, while the most pessimistic values it at US$8.79. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2021 brings more of the same, according to the analysts, with revenue forecast to display 22% growth on an annualised basis. That is in line with its 19% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 3.4% per year. So although Gran Colombia Gold is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Gran Colombia Gold this year. They're also forecasting more rapid revenue growth than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Gran Colombia Gold.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 5 potential flags with Gran Colombia Gold, including major dilution from new stock issuance in the past year. You can learn more, and discover the 2 other flags we've identified, 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.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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