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News Flash: One Analyst Just Made A Meaningful Upgrade To Their ReadCloud Limited (ASX:RCL) Forecasts

ReadCloud Limited (ASX:RCL) shareholders will have a reason to smile today, with the covering analyst 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.

After this upgrade, ReadCloud's solitary analyst is now forecasting revenues of AU$8.3m in 2020. This would be a sizeable 58% improvement in sales compared to the last 12 months. Before the latest update, the analyst was foreseeing AU$7.5m of revenue in 2020. The consensus has definitely become more optimistic, showing a nice gain to revenue forecasts.

View our latest analysis for ReadCloud

ASX:RCL Past and Future Earnings May 27th 2020
ASX:RCL Past and Future Earnings May 27th 2020

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 ReadCloud's revenue growth is expected to slow, with forecast 58% increase next year well below the historical 96% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 16% next year. Even after the forecast slowdown in growth, it seems obvious that ReadCloud is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst lifted their revenue estimates for this year. The analyst also expects revenues to grow faster than the wider market. Given that the analyst appears to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at ReadCloud.

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The covering analyst is definitely bullish on ReadCloud, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 3 other risks we've identified .

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.

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.

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.