Analyst Estimates: Here's What Brokers Think Of Pason Systems Inc. (TSE:PSI) After Its Annual Report

Last week, you might have seen that Pason Systems Inc. (TSE:PSI) released its full-year result to the market. The early response was not positive, with shares down 7.0% to CA$12.31 in the past week. It was a credible result overall, with revenues of CA$414m and statutory earnings per share of CA$1.52 both in line with analyst estimates, showing that Pason Systems is executing in line with expectations. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Pason Systems

Taking into account the latest results, the most recent consensus for Pason Systems from five analysts is for revenues of CA$439.9m in 2025. If met, it would imply a modest 6.2% increase on its revenue over the past 12 months. Statutory earnings per share are expected to nosedive 31% to CA$1.06 in the same period. Before this earnings report, the analysts had been forecasting revenues of CA$441.7m and earnings per share (EPS) of CA$1.15 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at CA$17.70, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Pason Systems at CA$19.50 per share, while the most bearish prices it at CA$16.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 Pason Systems' revenue growth is expected to slow, with the forecast 6.2% annualised growth rate until the end of 2025 being well below the historical 16% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.2% annually. Factoring in the forecast slowdown in growth, it looks like Pason Systems is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at CA$17.70, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Pason Systems. Long-term earnings power is much more important than next year's profits. We have forecasts for Pason Systems going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Pason Systems (at least 2 which make us uncomfortable) , and understanding these should be part of your investment process.

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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.