Celebrations may be in order for R&S Group Holding AG (VTX:RSGN) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The market may be pricing in some blue sky too, with the share price gaining 17% to CHF16.50 in the last 7 days. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.
Following the upgrade, the current consensus from R&S Group Holding's one analyst is for revenues of CHF287m in 2024 which - if met - would reflect a huge 32% increase on its sales over the past 12 months. Per-share earnings are expected to soar 170% to CHF1.12. Previously, the analyst had been modelling revenues of CHF232m and earnings per share (EPS) of CHF1.13 in 2024. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.
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The analyst increased their price target 55% to CHF20.10, perhaps signalling that higher revenues are a strong leading indicator for R&S Group Holding's valuation.
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 analyst is definitely expecting R&S Group Holding's growth to accelerate, with the forecast 32% annualised growth to the end of 2024 ranking favourably alongside historical growth of 17% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect R&S Group Holding to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with the analyst holding earnings per share steady, in line with previous estimates. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given that the analyst appears to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at R&S Group Holding.