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MotorK plc (AMS:MTRK) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.
After this upgrade, MotorK's three analysts are now forecasting revenues of €54m in 2023. This would be a huge 41% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 79% to €0.077. Yet before this consensus update, the analysts had been forecasting revenues of €40m and losses of €0.08 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.
View our latest analysis for MotorK
The consensus price target rose 30% to €3.15, with the analysts encouraged by the higher revenue and lower forecast losses for this year. 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. The most optimistic MotorK analyst has a price target of €3.60 per share, while the most pessimistic values it at €2.70. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting MotorK is an easy business to forecast or the underlying assumptions are obvious.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the MotorK's past performance and to peers in the same industry. It's clear from the latest estimates that MotorK's rate of growth is expected to accelerate meaningfully, with the forecast 41% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 17% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.6% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect MotorK 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 MotorK's prospects. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at MotorK.