Yahoo Finance Upgrade: Analysts Just Made An Increase To Their Profire Energy, Inc. (NASDAQ:PFIE) Forecasts
Celebrations may be in order for Profire Energy, Inc. (NASDAQ:PFIE) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance. Profire Energy has also found favour with investors, with the stock up a noteworthy 19% to US$1.32 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.
Following the upgrade, the current consensus from Profire Energy's solo analyst is for revenues of US$58m in 2023 which - if met - would reflect a sizeable 26% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 104% to US$0.17. Previously, the analyst had been modelling revenues of US$54m and earnings per share (EPS) of US$0.095 in 2023. So it seems there's been a definite increase in optimism about Profire Energy's future following the latest consensus numbers, with a sizeable expansion in the earnings per share forecasts in particular.
See our latest analysis for Profire Energy
Despite these upgrades, the analyst has not made any major changes to their price target of US$2.25, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Profire Energy at US$3.00 per share, while the most bearish prices it at US$1.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Profire Energy is forecast to grow faster in the future than it has in the past, with revenues expected to display 36% annualised growth until the end of 2023. If achieved, this would be a much better result than the 8.2% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.4% annually. Not only are Profire Energy's 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 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. 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 Profire Energy.
Better yet, our automated discounted cash flow calculation (DCF) suggests Profire Energy could be moderately undervalued. For more information, you can click through to our platform to learn more about our valuation approach.
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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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