Converge Technology Solutions Corp. (TSE:CTS) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. Investor sentiment seems to be improving too, with the share price up 5.6% to CA$11.43 over the past 7 days. Could this big upgrade push the stock even higher?

Following the upgrade, the most recent consensus for Converge Technology Solutions from its eight analysts is for revenues of CA$1.7b in 2021 which, if met, would be a sizeable 63% increase on its sales over the past 12 months. Statutory earnings per share are presumed to soar 5,763% to CA$0.33. Previously, the analysts had been modelling revenues of CA$1.5b and earnings per share (EPS) of CA$0.28 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for Converge Technology Solutions

With these upgrades, we're not surprised to see that the analysts have lifted their price target 20% to CA$13.53 per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Converge Technology Solutions, with the most bullish analyst valuing it at CA$14.75 and the most bearish at CA$12.50 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Converge Technology Solutions' growth to accelerate, with the forecast 93% annualised growth to the end of 2021 ranking favourably alongside historical growth of 43% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Converge Technology Solutions is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Converge Technology Solutions could be worth investigating further.