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Need To Know: Analysts Are Much More Bullish On 888 Holdings plc (LON:888)

Shareholders in 888 Holdings plc (LON:888) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

Following the upgrade, the latest consensus from 888 Holdings' seven analysts is for revenues of US$810m in 2020, which would reflect a substantial 22% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 29% to US$0.24. Previously, the analysts had been modelling revenues of US$729m and earnings per share (EPS) of US$0.20 in 2020. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for 888 Holdings

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earnings-and-revenue-growth

It will come as no surprise to learn that the analysts have increased their price target for 888 Holdings 14% to US$4.38 on the back of these upgrades. 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. Currently, the most bullish analyst values 888 Holdings at US$3.64 per share, while the most bearish prices it at US$3.01. This is a very narrow spread of estimates, implying either that 888 Holdings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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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 888 Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 22% revenue growth noticeably faster than its historical growth of 5.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect 888 Holdings to grow faster than the wider 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at 888 Holdings.

Analysts are clearly in love with 888 Holdings at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as recent substantial insider selling. For more information, you can click through to our platform to learn more about this and the 3 other flags we've identified .

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.