EKF Diagnostics Holdings plc (LON:EKF) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. EKF Diagnostics Holdings has also found favour with investors, with the stock up a worthy 22% to UK£0.78 over the past week. Could this upgrade be enough to drive the stock even higher?

Following the latest upgrade, the twin analysts covering EKF Diagnostics Holdings provided consensus estimates of UK£60m revenue in 2021, which would reflect a small 7.4% decline on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of UK£54m in 2021. It looks like there's been a clear increase in optimism around EKF Diagnostics Holdings, given the nice increase in revenue forecasts.

Check out our latest analysis for EKF Diagnostics Holdings

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 7.4% by the end of 2021. This indicates a significant reduction from annual growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 10% per year. It's pretty clear that EKF Diagnostics Holdings' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They also expect company revenue to perform worse 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 EKF Diagnostics Holdings.

Better yet, our automated discounted cash flow calculation (DCF) suggests EKF Diagnostics Holdings could be moderately undervalued. You can learn more about our valuation methodology on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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