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Intrepid Potash, Inc. (NYSE:IPI) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.
Following the upgrade, the current consensus from Intrepid Potash's four analysts is for revenues of US$207m in 2021 which - if met - would reflect a huge 38% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$185m of revenue in 2021. The consensus has definitely become more optimistic, showing a decent improvement in revenue forecasts.
The consensus price target rose 27% to US$19.00, with the analysts clearly more optimistic about Intrepid Potash's prospects following this update. 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 Intrepid Potash analyst has a price target of US$21.00 per share, while the most pessimistic values it at US$11.00. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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 Intrepid Potash's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 38% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 3.1% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.1% per year. So it looks like Intrepid Potash is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Intrepid Potash this year. Analysts also expect revenues to grow faster than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Intrepid Potash.
Better yet, Intrepid Potash is expected to break-even soon - within the next few years - according to analyst forecasts, which would be a momentous event for shareholders. You can learn more about these forecasts, for free on our platform here.
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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