Analyst Estimates: Here's What Brokers Think Of PLAYSTUDIOS, Inc. (NASDAQ:MYPS) After Its Full-Year Report

PLAYSTUDIOS, Inc. (NASDAQ:MYPS) shareholders are probably feeling a little disappointed, since its shares fell 6.1% to US$2.00 in the week after its latest annual results. Revenues were in line with expectations, at US$311m, while statutory losses ballooned to US$0.15 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for PLAYSTUDIOS

Taking into account the latest results, the current consensus from PLAYSTUDIOS' eight analysts is for revenues of US$319.5m in 2024. This would reflect a credible 2.8% increase on its revenue over the past 12 months. Earnings are expected to improve, with PLAYSTUDIOS forecast to report a statutory profit of US$0.037 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$318.6m and earnings per share (EPS) of US$0.022 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the great increase in earnings per share expectations following these results.

The consensus price target was unchanged at US$4.92, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on PLAYSTUDIOS, with the most bullish analyst valuing it at US$7.00 and the most bearish at US$4.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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 PLAYSTUDIOS' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.8% growth on an annualised basis. This is compared to a historical growth rate of 6.9% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.0% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than PLAYSTUDIOS.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around PLAYSTUDIOS' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that PLAYSTUDIOS' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$4.92, with the latest estimates not enough to have an impact on their price targets.

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

Even so, be aware that PLAYSTUDIOS is showing 1 warning sign 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.