Celebrations can be appropriate for Audinate Group Limited (ASX:AD8) shareholders, with analysts providing a significant update to their statutory estimates for the company. Consensus estimates suggest investors could expect a sizable increase in statutory revenue and earnings per share, with analysts modeling a real improvement in corporate performance. The market may also value blue skies, with the share price gaining 19% to AU$9.84 over the past 7 days. We will be curious to see if these new estimates convince the market to raise the share price further.
After the upgrade, the four analysts covering the Audinate Group now forecast revenue of A$46 million in 2022. If achieved, it would reflect a whopping 21% improvement in sales over the past 12 months. The loss per share is expected to improve slightly, narrowing to AU$0.052. Yet prior to this consensus update, analysts were forecasting revenue of A$41 million and losses of A$0.072 per share in 2022. We can see that there has certainly been a change in sentiment in this update. day, analysts administering a significant upgrade this year. revenue estimates, while reducing their loss estimates.
Check out our latest analysis for Audinate Group
The consensus price target rose 5.2% to A$10.15 as analysts were encouraged by higher earnings and lower expected losses for this year. The consensus price target is only an average of individual analyst targets, so it might be useful to see how wide the range of the underlying estimates is. Currently, the most bullish analyst values Audinate Group at AU$11.75 per share, while the most bearish one values it at AU$9.00. Still, with such a narrow range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Looking at the big picture, one way to make sense of these forecasts is to see how they compare to both past performance and industry growth estimates. It is clear from the latest estimates that Audinate Group’s growth rate is set to accelerate significantly, with forecast annualized revenue growth of 47% through the end of 2022 significantly faster than its historical growth of 19% per year over the past five years. Compare that with other companies in the same industry, which are expected to increase revenue by 22% per year. It seems clear that while growth prospects are brighter than in the recent past, analysts also expect Audinate Group to grow faster than the industry at large.
The highlight for us was that the consensus cut its estimated losses this year, perhaps suggesting that the Audinate Group is gradually heading towards profitability. Fortunately, analysts have also updated their earnings estimates, and our data indicates that sales should perform better than the broader market. Given that the consensus seems almost universally bullish, with a substantial increase in forecasts and a higher price target, Audinate Group might merit further investigation.
It’s a pretty serious upgrade, but shareholders might be even happier to know that forecasts expect Audinate Group to be able to break even within the next few years. You can learn more about these forecasts, for free on our platform here.
Of course, see the management of the company invest large sums of money in a stock can be just as useful as knowing if analysts are updating their estimates. So you can also search this free list of stocks that insiders buy.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.