Tremor International Ltd ( LON:TRMR ) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. The market may be pricing in some blue sky too, with the share price gaining 17% to UK£8.14 in the last 7 days. Could this upgrade be enough to drive the stock even higher?
Following the upgrade, the current consensus from Tremor International's twin analysts is for revenues of US$285m in 2021 which - if met - would reflect a notable 17% increase on its sales over the past 12 months. Statutory earnings per share are forecast to be US$0.22, approximately in line with the last 12 months. Previously, the analysts had been modelling revenues of US$251m and earnings per share (EPS) of US$0.13 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
Check out our latest analysis for Tremor International
Despite these upgrades, the consensus price target fell 10.0% to US$14.99, perhaps signalling that the uplift in performance is not expected to last. 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. Currently, the most bullish analyst values Tremor International at US$16.99 per share, while the most bearish prices it at US$13.00. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.
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 period to the end of 2021 brings more of the same, according to the analysts, with revenue forecast to display 17% growth on an annualised basis. That is in line with its 18% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 7.6% per year. So although Tremor International is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.