Broker Revenue Forecasts For Star7 S.p.A. (BIT:STAR7) Are Surging Higher

Star7 S.p.A. (BIT:STAR7) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year’s statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.

Following the upgrade, the current consensus from Star7’s dual analysts is for revenues of €108m in 2023 which – if met – would reflect a sizeable 52% increase on its sales over the past 12 months. Per-share earnings are expected to leap 203% to €0.69. Previously, the analysts had been modelling revenues of €96m and earnings per share (EPS) of €0.65 in 2023. Sentiment certainly seems to have improved in recent times, with a substantial gain in revenue and a small increase to earnings per share estimates.

View our latest analysis for Star7

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of €12.95, suggesting that the forecast performance does not have a long term impact on the company’s valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Star7, with the most bullish analyst valuing it at €13.00 and the most bearish at €12.90 per share. This is a very narrow spread of estimates, implying either that Star7 is an easy company to value, or – more likely – the analysts are relying heavily on some key assumptions.

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. It’s clear from the latest estimates that Star7’s rate of growth is expected to accelerate meaningfully, with the forecast 52% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 36% over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it’s pretty clear that Star7 is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better 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 Star7.

These earnings upgrades look like a sterling endorsement, but before diving in – you should know that we’ve spotted 5 potential flags with Star7, including its declining profit margins. You can learn more, and discover the 4 other flags we’ve identified, for free 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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.