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Terran Orbital Corporation (NYSE:LLAP) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Terran Orbital will make substantially more sales than they'd previously expected.
After this upgrade, Terran Orbital's four analysts are now forecasting revenues of US$247m in 2023. This would be a major 126% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 25% to US$0.76. Yet before this consensus update, the analysts had been forecasting revenues of US$199m and losses of US$0.84 per share in 2023. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.
See our latest analysis for Terran Orbital
Despite these upgrades, the analysts have not made any major changes to their price target of US$8.70, implying that their latest estimates don't have a long term impact on what they think the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Terran Orbital, with the most bullish analyst valuing it at US$12.00 and the most bearish at US$7.00 per share. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Terran Orbital's growth to accelerate, with the forecast 197% annualised growth to the end of 2023 ranking favourably alongside historical growth of 151% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Terran Orbital to grow faster than the wider industry.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Terran Orbital's prospects. 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 Terran Orbital.