New Forecasts: Here's What Analysts Think The Future Holds For Advantage Energy Ltd. (TSE:AAV)

Shareholders in Advantage Energy Ltd. (TSE:AAV) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Advantage Energy will make substantially more sales than they'd previously expected. Investor sentiment seems to be improving too, with the share price up 4.3% to CA$10.61 over the past 7 days. Could this big upgrade push the stock even higher?

Following the upgrade, the most recent consensus for Advantage Energy from its four analysts is for revenues of CA$699m in 2024 which, if met, would be a sizeable 38% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 25% to CA$0.73. Previously, the analysts had been modelling revenues of CA$589m and earnings per share (EPS) of CA$0.68 in 2024. The most recent forecasts are noticeably more optimistic, with a solid increase in revenue estimates and a lift to earnings per share as well.

See our latest analysis for Advantage Energy

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Despite these upgrades, the analysts have not made any major changes to their price target of CA$13.95, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth.

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 Advantage Energy's rate of growth is expected to accelerate meaningfully, with the forecast 53% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 25% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Advantage Energy 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. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Advantage Energy.

Better yet, our automated discounted cash flow calculation (DCF) suggests Advantage Energy could be moderately undervalued. You can learn more about our valuation methodology 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 with high insider ownership.

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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.

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