Results: Praemium Limited Exceeded Expectations And The Consensus Has Updated Its Estimates

Praemium Limited (ASX:PPS) just released its latest annual results and things are looking bullish. The company beat forecasts, with revenue of AU$83m, some 2.6% above estimates, and statutory earnings per share (EPS) coming in at AU$0.018, 27% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 Praemium

Taking into account the latest results, the consensus forecast from Praemium's eight analysts is for revenues of AU$102.3m in 2025. This reflects a substantial 24% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 40% to AU$0.025. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$97.6m and earnings per share (EPS) of AU$0.018 in 2025. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a great increase in earnings per share in particular.

It will come as no surprise to learn that the analysts have increased their price target for Praemium 9.8% to AU$0.65on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Praemium analyst has a price target of AU$0.85 per share, while the most pessimistic values it at AU$0.43. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. It's clear from the latest estimates that Praemium's rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 13% p.a. 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 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Praemium is expected to grow much faster than its 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 Praemium following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 estimates - from multiple Praemium analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Praemium 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.