Earnings Miss: CD Projekt S.A. Missed EPS By 27% And Analysts Are Revising Their Forecasts

Last week, you might have seen that CD Projekt S.A. (WSE:CDR) released its second-quarter result to the market. The early response was not positive, with shares down 2.3% to zł252 in the past week. Revenue of zł217m surpassed estimates by 4.3%, although statutory earnings per share missed badly, coming in 27% below expectations at zł0.69 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Following the recent earnings report, the consensus from 15 analysts covering CD Projekt is for revenues of zł964.1m in 2025. This implies a measurable 3.9% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to descend 17% to zł3.76 in the same period. In the lead-up to this report, the analysts had been modelling revenues of zł904.2m and earnings per share (EPS) of zł3.61 in 2025. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Check out our latest analysis for CD Projekt

Despite these upgrades,the analysts have not made any major changes to their price target of zł220, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. There are some variant perceptions on CD Projekt, with the most bullish analyst valuing it at zł350 and the most bearish at zł95.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CD Projekt's past performance and to peers in the same industry. We would also point out that the forecast 7.7% annualised revenue decline to the end of 2025 is roughly in line with the historical trend, which saw revenues shrink 8.0% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 30% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect CD Projekt to suffer 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 CD Projekt following these results. They also upgraded their revenue estimates for next year, even though it is expected to grow slower 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for CD Projekt going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for CD Projekt that you should be aware of.

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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.