Pivotree Inc. (CVE:PVT) Just Reported, And Analysts Assigned A CA$2.31 Price Target

The analysts might have been a bit too bullish on Pivotree Inc. (CVE:PVT), given that the company fell short of expectations when it released its second-quarter results last week. It was a pretty negative result overall, with revenues of CA$20m missing analyst predictions by 2.9%. Worse, the business reported a statutory loss of CA$0.17 per share, much larger than the analysts had forecast prior to the result. Following the result, the 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Pivotree

Taking into account the latest results, Pivotree's four analysts currently expect revenues in 2024 to be CA$82.7m, approximately in line with the last 12 months. Losses are supposed to decline, shrinking 11% from last year to CA$0.33. Before this latest report, the consensus had been expecting revenues of CA$86.0m and CA$0.17 per share in losses. So it's pretty clear the analysts have mixed opinions on Pivotree after this update; revenues were downgraded and per-share losses expected to increase.

The average price target fell 17% to CA$2.31, implicitly signalling that lower earnings per share are a leading indicator for Pivotree's 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. The most optimistic Pivotree analyst has a price target of CA$3.50 per share, while the most pessimistic values it at CA$1.25. 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. We would highlight that revenue is expected to reverse, with a forecast 1.3% annualised decline to the end of 2024. That is a notable change from historical growth of 11% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.8% annually for the foreseeable future. It's pretty clear that Pivotree's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Pivotree's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Pivotree. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Pivotree going out to 2025, and you can see them free on our platform here..

Even so, be aware that Pivotree is showing 3 warning signs in our investment analysis , you should know about...

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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.