Pivot Technology Solutions, Inc. Just Released Its Third-Quarter And Analysts Have Been Updating Their Estimates
Last week, you might have seen that Pivot Technology Solutions, Inc. (TSE:PTG) released its quarterly result to the market. The early response was not positive, with shares down 5.6% to CA$1.52 in the past week. Revenues were US$270m, and Pivot Technology Solutions was a dismal 13% short of estimates. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest forecasts to see what analysts are expecting for next year.
Check out our latest analysis for Pivot Technology Solutions
Taking into account the latest results, the current consensus from Pivot Technology Solutions's one analyst is for revenues of US$1.26b in 2020, which would reflect a modest 3.6% increase on its sales over the past 12 months. Pivot Technology Solutions is also expected to turn profitable, with earnings of US$0.23 per share. Before this earnings report, analysts had been forecasting revenues of US$1.31b and earnings per share (EPS) of US$0.18 in 2020. Although analysts have lowered their sales forecasts, they've also made a very substantial lift in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.
The consensus has made no major changes to the price target of US$2.49, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Pivot Technology Solutions's past performance and to peers in the same market. For example, we noticed that Pivot Technology Solutions's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow at 3.6%, well above its historical decline of 0.7% a year over the past five years. Compare this against analyst estimates for the wider market, which suggest that (in aggregate) market revenues are expected to grow 4.3% next year. So although Pivot Technology Solutions's revenue growth is expected to improve, it is still expected to grow slower than the market.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Pivot Technology Solutions's earnings potential next year. Unfortunately, analysts also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider market. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.
It might also be worth considering whether Pivot Technology Solutions's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.