Codexis, Inc. (NASDAQ:CDXS) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Codexis will make substantially more sales than they'd previously expected. Investor sentiment seems to be improving too, with the share price up 9.0% to US$20.05 over the past 7 days. Could this big upgrade push the stock even higher?

After this upgrade, Codexis' seven analysts are now forecasting revenues of US$142m in 2022. This would be a sizeable 36% improvement in sales compared to the last 12 months. Losses are supposed to balloon 46% to US$0.48 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$123m and losses of US$0.52 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

See our latest analysis for Codexis

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Codexis' growth to accelerate, with the forecast 36% annualised growth to the end of 2022 ranking favourably alongside historical growth of 15% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Codexis to grow faster than the wider industry.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Codexis' prospects. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Codexis.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Codexis analysts - going out to 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.