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Shareholders in Vista Group International Limited (NZSE:VGL) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Vista Group International will make substantially more sales than they'd previously expected. Investor sentiment seems to be improving too, with the share price up 5.8% to NZ$1.27 over the past 7 days. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
Following the upgrade, the consensus from three analysts covering Vista Group International is for revenues of NZ$65m in 2020, implying a painful 55% decline in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of NZ$56m in 2020. The consensus has definitely become more optimistic, showing a nice gain to revenue forecasts.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with the forecast 55% revenue decline a notable change from historical growth of 21% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 17% next year. It's pretty clear that Vista Group International's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Vista Group International this year. They also expect company revenue to perform worse 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 Vista Group International.
But wait - there's more! At least one of Vista Group International's three analysts has provided estimates out to 2023, which can be seen for 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.
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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