Prio S.A. Just Missed EPS By 19%: Here's What Analysts Think Will Happen Next

As you might know, Prio S.A. (BVMF:PRIO3) recently reported its second-quarter numbers. Prio beat revenue forecasts by a solid 20% to hit R$4.6b. Statutory earnings per share fell 19% short of expectations, at R$1.69. 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. 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.

View our latest analysis for Prio

Following the recent earnings report, the consensus from 14 analysts covering Prio is for revenues of R$14.4b in 2024. This implies a small 3.0% decline in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 7.5% to R$7.26. Before this earnings report, the analysts had been forecasting revenues of R$14.3b and earnings per share (EPS) of R$6.88 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of R$62.96, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Prio analyst has a price target of R$82.00 per share, while the most pessimistic values it at R$36.80. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We would highlight that revenue is expected to reverse, with a forecast 5.9% annualised decline to the end of 2024. That is a notable change from historical growth of 46% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.6% per year. It's pretty clear that Prio's revenues are expected to perform substantially worse than 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 Prio following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at R$62.96, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. 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..

It might also be worth considering whether Prio's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.