Stock Analysis

Earnings Update: PLAYSTUDIOS, Inc. (NASDAQ:MYPS) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts

NasdaqGM:MYPS
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As you might know, PLAYSTUDIOS, Inc. (NASDAQ:MYPS) just kicked off its latest first-quarter results with some very strong numbers. Results overall were solid, with revenues arriving 8.0% better than analyst forecasts at US$80m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.02 per share, were 8.0% smaller than the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 PLAYSTUDIOS

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NasdaqGM:MYPS Earnings and Revenue Growth May 11th 2023

After the latest results, the eight analysts covering PLAYSTUDIOS are now predicting revenues of US$311.4m in 2023. If met, this would reflect a modest 3.8% improvement in sales compared to the last 12 months. The company is forecast to report a statutory loss of US$0.095 in 2023, a sharp decline from a profit over the last year. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$308.3m and losses of US$0.095 per share in 2023.

The consensus price target was unchanged at US$5.48, suggesting that the business - losses and all - is executing in line with estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic PLAYSTUDIOS analyst has a price target of US$7.00 per share, while the most pessimistic values it at US$3.00. 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.

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. The analysts are definitely expecting PLAYSTUDIOS' growth to accelerate, with the forecast 5.1% annualised growth to the end of 2023 ranking favourably alongside historical growth of 3.5% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.9% per year. So it's clear that despite the acceleration in growth, PLAYSTUDIOS is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that PLAYSTUDIOS' revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$5.48, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for PLAYSTUDIOS going out to 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for PLAYSTUDIOS that you should be aware of.

Valuation is complex, but we're helping make it simple.

Find out whether PLAYSTUDIOS is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.