CD Projekt S.A. Just Recorded A 43% EPS Beat: Here's What Analysts Are Forecasting Next

Last week, you might have seen that CD Projekt S.A. (WSE:CDR) released its quarterly result to the market. The early response was not positive, with shares down 8.3% to zł130 in the past week. Revenues were zł227m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at zł1.00, an impressive 43% ahead of estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for CD Projekt

Following the recent earnings report, the consensus from 14 analysts covering CD Projekt is for revenues of zł804.9m in 2024. This implies a stressful 37% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to plummet 52% to zł2.47 in the same period. In the lead-up to this report, the analysts had been modelling revenues of zł799.7m and earnings per share (EPS) of zł2.29 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at zł112, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values CD Projekt at zł170 per share, while the most bearish prices it at zł80.00. 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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 46% by the end of 2024. This indicates a significant reduction from annual growth of 10% 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 14% per year. It's pretty clear that CD Projekt's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around CD Projekt's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. 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.

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

We also provide an overview of the CD Projekt Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.