Piesat Information Technology Co., Ltd. (SHSE:688066) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.
After the upgrade, the five analysts covering Piesat Information Technology are now predicting revenues of CN¥2.2b in 2022. If met, this would reflect a substantial 49% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 49% to CN¥1.60. Prior to this update, the analysts had been forecasting revenues of CN¥1.8b and earnings per share (EPS) of CN¥1.52 in 2022. Sentiment certainly seems to have improved in recent times, with a chunky increase in revenue and a small lift in earnings per share estimates.
See our latest analysis for Piesat Information TechnologySHSE:688066 Earnings and Revenue Growth April 17th 2022
Despite these upgrades, the analysts have not made any major changes to their price target of CN¥75.36, 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. The most optimistic Piesat Information Technology analyst has a price target of CN¥86.35 per share, while the most pessimistic values it at CN¥58.23. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. The analysts are definitely expecting Piesat Information Technology's growth to accelerate, with the forecast 49% annualised growth to the end of 2022 ranking favourably alongside historical growth of 33% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 22% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Piesat Information Technology to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. 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 Piesat Information Technology.
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 Piesat Information Technology analysts - going out to 2023, and you can see them free 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.
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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.