Paymentus Holdings, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Paymentus Holdings, Inc. (NYSE:PAY) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 9.7% to hit US$275m. Paymentus Holdings reported statutory earnings per share (EPS) US$0.11, which was a notable 16% above what the analysts had forecast. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the consensus forecast from Paymentus Holdings' seven analysts is for revenues of US$1.10b in 2025. This reflects a meaningful 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 6.0% to US$0.43. Before this earnings report, the analysts had been forecasting revenues of US$1.07b and earnings per share (EPS) of US$0.46 in 2025. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a meaningful to revenue, the consensus also made a small dip in its earnings per share forecasts.

View our latest analysis for Paymentus Holdings

Curiously, the consensus price target rose 16% to US$36.00. We can only conclude that the forecast revenue growth is expected to offset the impact of the expected fall in earnings. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Paymentus Holdings analyst has a price target of US$40.00 per share, while the most pessimistic values it at US$34.00. This is a very narrow spread of estimates, implying either that Paymentus Holdings is an easy company to value, or - more likely - the analysts are relying heavily on some key 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. We would highlight that Paymentus Holdings' revenue growth is expected to slow, with the forecast 19% annualised growth rate until the end of 2025 being well below the historical 27% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.3% annually. Even after the forecast slowdown in growth, it seems obvious that Paymentus Holdings is also expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Paymentus Holdings. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Paymentus Holdings analysts - going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Paymentus Holdings , and understanding it should be part of your investment process.

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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.