Yahoo Finance Analysts' Revenue Estimates For Arrow Global Group PLC (LON:ARW) Are Surging Higher
Celebrations may be in order for Arrow Global Group PLC (LON:ARW) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Arrow Global Group will make substantially more sales than they'd previously expected.
After the upgrade, the six analysts covering Arrow Global Group are now predicting revenues of UK£173m in 2020. If met, this would reflect a substantial 57% improvement in sales compared to the last 12 months. Losses are forecast to hold steady at around UK£0.55. However, before this estimates update, the consensus had been expecting revenues of UK£137m and UK£0.58 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
See our latest analysis for Arrow Global Group
There was no major change to the consensus price target of UK£2.25, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Arrow Global Group analyst has a price target of UK£4.20 per share, while the most pessimistic values it at UK£0.87. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
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. The analysts are definitely expecting Arrow Global Group's growth to accelerate, with the forecast 57% growth ranking favourably alongside historical growth of 15% per annum 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 8.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Arrow Global Group is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Arrow Global Group's prospects. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Arrow Global Group.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Arrow Global Group analysts - going out to 2023, and you can see them 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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