Zephyr Energy plc (LON:ZPHR) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory 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 market may be pricing in some blue sky too, with the share price gaining 14% to UK￡0.042 in the last 7 days. Could this upgrade be enough to drive the stock even higher?

After this upgrade, Zephyr Energy's twin analysts are now forecasting revenues of US$37m in 2024. This would be a substantial 57% improvement in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$0.0053 in per-share earnings. Previously, the analysts had been modelling revenues of US$30m and earnings per share (EPS) of US$0.0047 in 2024. 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 Zephyr Energy

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

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Zephyr Energy'shistorical trends, as the 57% annualised revenue growth to the end of 2024 is roughly in line with the 69% annual revenue growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues fall 0.7% per year. So not only is Zephyr Energy expected to maintain its revenue growth despite the wider downturn, it's also forecast to grow faster than the industry as a whole.

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 this year. On the plus side, they also lifted their revenue estimates, and the company is 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, Zephyr Energy could be worth investigating further.

Analysts are clearly in love with Zephyr Energy at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 2 other risks we've identified .