Growth Investors: Industry Analysts Just Upgraded Their Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) Revenue Forecasts By 12%
Celebrations may be in order for Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Grid Dynamics Holdings will make substantially more sales than they'd previously expected.
Following the upgrade, the current consensus from Grid Dynamics Holdings' seven analysts is for revenues of US$298m in 2022 which - if met - would reflect a major 22% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$265m of revenue in 2022. It looks like there's been a clear increase in optimism around Grid Dynamics Holdings, given the nice gain to revenue forecasts.
Check out our latest analysis for Grid Dynamics Holdings
The consensus price target rose 8.7% to US$23.83, with the analysts clearly more optimistic about Grid Dynamics Holdings' prospects following this update. 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. Currently, the most bullish analyst values Grid Dynamics Holdings at US$28.00 per share, while the most bearish prices it at US$18.00. 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 Grid Dynamics Holdings shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Grid Dynamics Holdings' revenue growth is expected to slow, with the forecast 31% annualised growth rate until the end of 2022 being well below the historical 106% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% annually. So it's pretty clear that, while Grid Dynamics Holdings' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. Analysts also expect revenues to grow faster than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Grid Dynamics Holdings.
It's great to see the analysts upgrading their estimates, but the biggest highlight to us is that the business is expected to become profitable in the foreseeable future. For more information, you can click through to our free platform to learn more about these forecasts.
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 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.
