NCAB Group AB (publ) (STO:NCAB) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The stock price has risen 5.8% to kr87.40 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.

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After the upgrade, the four analysts covering NCAB Group are now predicting revenues of kr6.9b in 2027. If met, this would reflect a sizeable 51% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 104% to kr3.73. Prior to this update, the analysts had been forecasting revenues of kr6.0b and earnings per share (EPS) of kr2.98 in 2027. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for NCAB Group

Despite these upgrades, the analysts have not made any major changes to their price target of kr95.75, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that NCAB Group's rate of growth is expected to accelerate meaningfully, with the forecast 39% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 1.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that NCAB Group is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for next year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to next year's earnings expectations, it might be time to take another look at NCAB Group.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on NCAB Group that suggests the company could be somewhat undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.