One Analyst's Earnings Estimates For CooTek (Cayman) Inc. (NYSE:CTK) Are Surging Higher
Celebrations may be in order for CooTek (Cayman) Inc. (NYSE:CTK) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.
Following the upgrade, the most recent consensus for CooTek (Cayman) from its sole analyst is for revenues of US$546m in 2020 which, if met, would be a major 123% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analyst forecasting US$0.54 in per-share earnings. Previously, the analyst had been modelling revenues of US$482m and earnings per share (EPS) of US$0.46 in 2020. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
View our latest analysis for CooTek (Cayman)
With these upgrades, we're not surprised to see that the analyst has lifted their price target 6.1% to US$8.65 per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic CooTek (Cayman) analyst has a price target of US$14.00 per share, while the most pessimistic values it at US$5.60. This is a fairly broad spread of estimates, suggesting that the analyst is forecasting a wide range of possible outcomes for the business.
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. The analyst is definitely expecting CooTek (Cayman)'s growth to accelerate, with the forecast 123% growth ranking favourably alongside historical growth of 61% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that CooTek (Cayman) is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at CooTek (Cayman).
Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2021, which can be seen 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.
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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.
