Earnings Miss: Prio S.A. Missed EPS By 26% And Analysts Are Revising Their Forecasts

Prio S.A. (BVMF:PRIO3) shareholders are probably feeling a little disappointed, since its shares fell 2.2% to R$38.97 in the week after its latest third-quarter results. Statutory earnings per share fell badly short of expectations, coming in at R$1.06, some 26% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at R$2.9b. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Prio after the latest results.

Check out our latest analysis for Prio

Taking into account the latest results, the most recent consensus for Prio from eleven analysts is for revenues of R$17.5b in 2025. If met, it would imply a major 22% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 37% to R$8.04. Before this earnings report, the analysts had been forecasting revenues of R$16.5b and earnings per share (EPS) of R$8.16 in 2025. There doesn't appear to have been a major change in sentiment following the results, other than the modest lift to revenue estimates.

It may not be a surprise to see thatthe analysts have reconfirmed their price target of R$64.89, implying that the uplift in revenue is not expected to greatly contribute to Prio's valuation in the near term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Prio, with the most bullish analyst valuing it at R$79.00 and the most bearish at R$41.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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 pretty clear that there is an expectation that Prio's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 45% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 1.3% annually. Even after the forecast slowdown in growth, it seems obvious that Prio is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at R$64.89, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Prio going out to 2026, and you can see them free on our platform here..

You can also see whether Prio is carrying too much debt, and whether its balance sheet is healthy, 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.