Playtika Holding Corp. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
Playtika Holding Corp. (NASDAQ:PLTK) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was not a great result overall. While revenues of US$2.6b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 11% to hit US$0.64 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for Playtika Holding
Following last week's earnings report, Playtika Holding's 13 analysts are forecasting 2024 revenues to be US$2.57b, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 4.2% to US$0.66. In the lead-up to this report, the analysts had been modelling revenues of US$2.63b and earnings per share (EPS) of US$0.87 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.
It'll come as no surprise then, to learn that the analysts have cut their price target 17% to US$9.85. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Playtika Holding at US$20.00 per share, while the most bearish prices it at US$7.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Playtika Holding's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.1% growth on an annualised basis. This is compared to a historical growth rate of 8.1% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.1% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Playtika Holding.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Playtika Holding. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Playtika Holding's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Playtika Holding. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Playtika Holding going out to 2026, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Playtika Holding that you should be aware of.
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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.
