Shareholders in Chembio Diagnostics, Inc. (NASDAQ:CEMI) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The stock price has risen 6.0% to US$3.01 over the past week, suggesting investors are becoming more optimistic. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

After this upgrade, Chembio Diagnostics' three analysts are now forecasting revenues of US$54m in 2021. This would be a substantial 56% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$36m of revenue in 2021. It looks like there's been a clear increase in optimism around Chembio Diagnostics, given the great increase in revenue forecasts.

View our latest analysis for Chembio Diagnostics

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. It's clear from the latest estimates that Chembio Diagnostics' rate of growth is expected to accelerate meaningfully, with the forecast 144% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 12% p.a. 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 8.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Chembio Diagnostics is expected to grow much faster than its industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Chembio Diagnostics this year. The analysts also expect revenues to grow faster than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Chembio Diagnostics.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential concerns with Chembio Diagnostics, including a short cash runway. You can learn more, and discover the 3 other concerns we've identified, 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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