Analysts have just made a significant update to their forecasts for Zephyr Energy plc (LON:ZPHR)

Zephyr Energy Limited Liability Company (LON:ZPHR) shareholders will have something to smile about today as analysts have made significant updates to this year’s statutory forecasts. Consensus estimates suggest investors can expect significantly stronger statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. The market may also be pricing in blue skies as the share price has risen 14% to £0.042 in the last 7 days. Could this update be enough to boost the share price even further?

Following this update, Zephyr Energy’s twin analysts are now forecasting revenues of $37m in 2024. This would represent a significant 57% improvement in sales compared to the last 12 months. Losses are expected to turn to profits soon, with the analysts forecasting $0.0053 in earnings per share. Previously, the analysts had been modelling revenues of $30m and earnings per share (EPS) of $0.0047 in 2024. So we can see that there has been a fairly noticeable increase in analyst sentiment recently, with both revenues and earnings per share receiving a decent boost in the latest estimates.

Check out our latest analysis for Zephyr Energy

It will come as no surprise to learn that analysts have raised their target price for Zephyr Energy shares by 7.6% to £0.14 on the back of these upgrades.

Now, looking at the bigger picture, one way we can understand these forecasts is to look at how they compare to past performance and industry growth estimates. From the latest estimates, we can see that the forecasts are predicting a continuation of Zephyr Energy’s historical trends, as the 57% annual revenue growth through the end of 2024 is roughly in line with the 69% annual revenue growth over the past five years. Compare this to the broader industry (in aggregate), which is estimated to see its revenue decline by 0.7% per year. So, Zephyr Energy is expected to not only maintain its revenue growth despite the broader slowdown, but also grow faster than the broader industry.

Summary

The biggest takeaway for us from these new estimates is that analysts have raised their earnings per share estimates, expecting improved earnings power this year. On the positive side, they have also raised their revenue estimates, and the company is expected to outperform the broader market. Given that the consensus looks almost universally bullish, with significant increases in forecasts and a higher price target, Zephyr Energy could be worth investigating further.

Analysts are clearly in love with Zephyr Energy at the moment, but before we dive in – you should know that we have identified some warning signs about the business, such as its dilutive share issuance over the last year. For more information, you can click on our platform to learn more about this and 2 other risks we have identified.

Of course, seeing the management of the company invest large sums of money in stocks can be as useful as knowing whether analysts are updating their estimates. So you may also want to search for that free list of stocks with large insider ownership.

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This Simply Wall St article is for general information purposes only. Our commentary is based solely on historical data and analyst forecasts, and is based on an objective methodology. Our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamental data. Please note that our analysis may not reflect the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.