Zoono Group Limited’s (ASX:ZNO) Sole Analyst Just Made A Huge Upgrade To Their Forecasts
"Zoono Group Limited (ASX:ZNO) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year’s forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance. Investors have been pretty optimistic on Zoono Group too, with the stock up 25% to NZ$1.87 over the past week. Could this upgrade be enough to drive the stock even higher?
Following the upgrade, the current consensus from Zoono Group’s sole analyst is for revenues of NZ$38m in 2020 which – if met – would reflect a substantial increase on its sales over the past 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of NZ$0.067 per share this year. Previously, the analyst had been modelling revenues of NZ$25m and earnings per share (EPS) of NZ$0.044 in 2020. So we can see there’s been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
It will come as no surprise to learn that the analyst has increased their price target for Zoono Group 12% to NZ$3.88 on the back of these upgrades.
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. The analyst is definitely expecting Zoono Group’sgrowth to accelerate, with the forecast 13x growth ranking favourably alongside historical growth of 137% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.5% per year. Factoring in the forecast acceleration in revenue, it’s pretty clear that Zoono Group is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Zoono Group could be worth investigating further.
Still, the long-term prospects of the business are much more relevant than next year’s earnings. We have analyst estimates for Zoono Group going out as far as 2022, and you can see them free on our platform here.
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.
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