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Shareholders in Gentrack Group Limited (NZSE:GTK) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. Gentrack Group has also found favour with investors, with the stock up a notable 17% to NZ$9.50 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 latest consensus from Gentrack Group's six analysts is for revenues of NZ$201m in 2024, which would reflect an okay 7.2% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 53% to NZ$0.11. Prior to this update, the analysts had been forecasting revenues of NZ$171m and earnings per share (EPS) of NZ$0.098 in 2024. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
View our latest analysis for Gentrack Group
With these upgrades, we're not surprised to see that the analysts have lifted their price target 17% to NZ$9.11 per share.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Gentrack Group's revenue growth is expected to slow, with the forecast 7.2% annualised growth rate until the end of 2024 being well below the historical 12% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 16% per year. Factoring in the forecast slowdown in growth, it seems obvious that Gentrack Group is also expected to grow slower than other industry participants.
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. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Gentrack Group.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Gentrack Group analysts - going out to 2026, and you can see them free on our platform here.