Kraken Robotics Inc. (CVE:PNG) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. The stock price has risen 7.8% to CA$0.55 over the past week, suggesting investors are becoming more optimistic. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.
Following the upgrade, the most recent consensus for Kraken Robotics from its twin analysts is for revenues of CA$56m in 2023 which, if met, would be a decent 19% 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 CA$0.03 per share next year. Prior to this update, the analysts had been forecasting revenues of CA$50m and earnings per share (EPS) of CA$0.02 in 2023. 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.
Check out our latest analysis for Kraken Robotics
It will come as no surprise to learn that the analysts have increased their price target for Kraken Robotics 9.7% to CA$0.85 on the back of these upgrades. 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. There are some variant perceptions on Kraken Robotics, with the most bullish analyst valuing it at CA$0.90 and the most bearish at CA$0.80 per share. With such a narrow range of valuations, analysts apparently share similar views on what they think the business 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. We would highlight that Kraken Robotics' revenue growth is expected to slow, with the forecast 15% annualised growth rate until the end of 2023 being well below the historical 42% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.1% annually. Even after the forecast slowdown in growth, it seems obvious that Kraken Robotics is also expected 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 next year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Kraken Robotics 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 Kraken Robotics going out as far as 2024, 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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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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