Broker Revenue Forecasts For Telecom Plus Plc (LON:TEP) Are Surging Higher

Telecom Plus Plc (LON:TEP) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that Telecom Plus will make substantially more sales than they'd previously expected. The stock price has risen 9.2% to UK£24.90 over the past week, suggesting investors are becoming more optimistic. Could this big upgrade push the stock even higher?

Following the upgrade, the latest consensus from Telecom Plus' three analysts is for revenues of UK£2.6b in 2023, which would reflect a substantial 122% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing UK£2.1b of revenue in 2023. It looks like there's been a clear increase in optimism around Telecom Plus, given the great increase in revenue forecasts.

View our latest analysis for Telecom Plus

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There was no particular change to the consensus price target of UK£26.67, with Telecom Plus' latest outlook seemingly not enough to result in a change of valuation. 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. The most optimistic Telecom Plus analyst has a price target of UK£31.50 per share, while the most pessimistic values it at UK£22.50. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Telecom Plus shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Telecom Plus' growth to accelerate, with the forecast 4x annualised growth to the end of 2023 ranking favourably alongside historical growth of 6.1% per annum 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 0.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Telecom Plus to grow faster than the wider industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Telecom Plus this year. The analysts also expect revenues 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 Telecom Plus.

But wait - there's more! At least one of Telecom Plus' three analysts has provided estimates out to 2025, which can be seen for 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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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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