Yahoo Finance Growth Investors: Industry Analysts Just Upgraded Their PointsBet Holdings Limited (ASX:PBH) Revenue Forecasts By 14%
Shareholders in PointsBet Holdings Limited (ASX:PBH) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. PointsBet Holdings has also found favour with investors, with the stock up an impressive 18% to AU$5.80 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
Following the upgrade, the current consensus from PointsBet Holdings' two analysts is for revenues of AU$67m in 2020 which - if met - would reflect a substantial 64% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 50% to AU$0.33. Yet prior to the latest estimates, the analysts had been forecasting revenues of AU$59m and losses of AU$0.36 per share in 2020. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
See our latest analysis for PointsBet Holdings
It will come as no surprise to learn that the analysts have increased their price target for PointsBet Holdings 30% to AU$6.45 on the back of these upgrades. 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. There are some variant perceptions on PointsBet Holdings, with the most bullish analyst valuing it at AU$7.00 and the most bearish at AU$5.90 per share. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.
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. We would highlight that PointsBet Holdings' revenue growth is expected to slow, with forecast 64% increase next year well below the historical 129% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% next year. Even after the forecast slowdown in growth, it seems obvious that PointsBet Holdings is also expected to grow faster than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting PointsBet Holdings is moving incrementally towards profitability. 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. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at PointsBet Holdings.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for PointsBet Holdings going out as far as 2023, and you can see them 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. 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. Thank you for reading.
