Pegavision Corporation Just Missed Revenue By 6.6%: Here's What Analysts Think Will Happen Next

Pegavision Corporation (TWSE:6491) missed earnings with its latest second-quarter results, disappointing overly-optimistic forecasters. Pegavision missed analyst forecasts, with revenues of NT$1.6b and statutory earnings per share (EPS) of NT$6.09, falling short by 6.6% and 2.4% respectively. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Pegavision

Taking into account the latest results, Pegavision's four analysts currently expect revenues in 2024 to be NT$7.09b, approximately in line with the last 12 months. Per-share earnings are expected to rise 6.5% to NT$26.44. Yet prior to the latest earnings, the analysts had been anticipated revenues of NT$7.64b and earnings per share (EPS) of NT$27.78 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the NT$527 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. The most optimistic Pegavision analyst has a price target of NT$576 per share, while the most pessimistic values it at NT$475. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Pegavision is an easy business to forecast or the the analysts are all using similar assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Pegavision's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.3% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 14% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Pegavision.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at NT$527, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Pegavision going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 3 warning signs for Pegavision you should be aware of, and 1 of them can't be ignored.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com