Upgrade: Analysts Just Made A Huge Increase To Their Flow Traders N.V. (AMS:FLOW) Forecasts
Flow Traders N.V. (AMS:FLOW) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance. The market may be pricing in some blue sky too, with the share price gaining 16% to €27.72 in the last 7 days. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.
After the upgrade, the four analysts covering Flow Traders are now predicting revenues of €464m in 2020. If met, this would reflect a sizeable 32% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 254% to €4.06. Before this latest update, the analysts had been forecasting revenues of €293m and earnings per share (EPS) of €1.98 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.
See our latest analysis for Flow Traders
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of €29.00, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. Currently, the most bullish analyst values Flow Traders at €40.00 per share, while the most bearish prices it at €21.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the 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. It's clear from the latest estimates that Flow Traders' rate of growth is expected to accelerate meaningfully, with the forecast 32% revenue growth noticeably faster than its historical growth of 4.7% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Flow Traders to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Flow Traders.
Better yet, our automated discounted cash flow calculation (DCF) suggests Flow Traders could be moderately undervalued. You can learn more about our valuation methodology 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
