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Remark Holdings, Inc. (NASDAQ:MARK) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's forecasts. 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. The market seems to be pricing in some improvement in the business too, with the stock up 7.7% over the past week, closing at US$2.39. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
Following the upgrade, the current consensus from Remark Holdings' solitary analyst is for revenues of US$34m in 2021 which - if met - would reflect a sizeable 231% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 31% to US$0.11. Yet prior to the latest estimates, the analyst had been forecasting revenues of US$28m and losses of US$0.15 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that Remark Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 231% annualised growth until the end of 2021. If achieved, this would be a much better result than the 34% annual decline 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 17% per year. Not only are Remark Holdings' revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analyst reduced their loss per share estimates for this year, reflecting increased optimism around Remark Holdings' prospects. 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 Remark Holdings.
The covering analyst is definitely bullish on Remark Holdings, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including a short cash runway. You can learn more, and discover the 2 other concerns 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. 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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