Analysts' Revenue Estimates For Playa Hotels & Resorts N.V. (NASDAQ:PLYA) Are Surging Higher
Playa Hotels & Resorts N.V. (NASDAQ:PLYA) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.
Following the upgrade, the latest consensus from Playa Hotels & Resorts' five analysts is for revenues of US$397m in 2021, which would reflect a substantial 131% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 52% to US$1.07. Yet before this consensus update, the analysts had been forecasting revenues of US$352m and losses of US$1.12 per share in 2021. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.
See our latest analysis for Playa Hotels & Resorts
There was no major change to the consensus price target of US$9.17, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Playa Hotels & Resorts, with the most bullish analyst valuing it at US$11.00 and the most bearish at US$5.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Playa Hotels & Resorts' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 205% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 4.8% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 22% annually. So it looks like Playa Hotels & Resorts is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Playa Hotels & Resorts is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Playa Hotels & Resorts.
Better yet, Playa Hotels & Resorts is expected to break-even soon - within the next few years - according to analyst forecasts, which would be a momentous event for shareholders. 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.
This article by Simply Wall St is general in nature. 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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