PEXA Group Limited Just Missed Earnings - But Analysts Have Updated Their Models

Investors in PEXA Group Limited (ASX:PXA) had a good week, as its shares rose 9.0% to close at AU$18.94 following the release of its half-yearly results. PEXA Group beat revenue forecasts by a solid 18% to hit AU$145m. Statutory earnings per share fell 11% short of expectations, at AU$0.054. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for PEXA Group

Following last week's earnings report, PEXA Group's five analysts are forecasting 2022 revenues to be AU$266.6m, approximately in line with the last 12 months. Earnings are expected to improve, with PEXA Group forecast to report a statutory profit of AU$0.10 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$254.2m and earnings per share (EPS) of AU$0.10 in 2022. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Despite these upgrades,the analysts have not made any major changes to their price target of AU$20.83, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values PEXA Group at AU$25.60 per share, while the most bearish prices it at AU$13.20. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 0.2% by the end of 2022. This indicates a significant reduction from annual growth of 51% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.7% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - PEXA Group is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards PEXA Group following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. The consensus price target held steady at AU$20.83, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for PEXA Group going out to 2024, and you can see them free on our platform here.

You can also view our analysis of PEXA Group's balance sheet, and whether we think PEXA Group is carrying too much debt, for free on our platform here.

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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.