Earnings Miss: Playtika Holding Corp. Missed EPS By 11% And Analysts Are Revising Their Forecasts

Last week saw the newest yearly earnings release from Playtika Holding Corp. (NASDAQ:PLTK), an important milestone in the company's journey to build a stronger business. Revenues were in line with forecasts, at US$2.6b, although statutory earnings per share came in 11% below what the analysts expected, at US$0.64 per share. 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 Playtika Holding

Following last week's earnings report, Playtika Holding's 13 analysts are forecasting 2024 revenues to be US$2.57b, approximately in line with the last 12 months. Statutory earnings per share are predicted to increase 4.2% to US$0.66. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.63b and earnings per share (EPS) of US$0.87 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

The consensus price target fell 17% to US$9.85, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Playtika Holding, with the most bullish analyst valuing it at US$20.00 and the most bearish at US$7.00 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Playtika Holding's revenue growth is expected to slow, with the forecast 0.1% annualised growth rate until the end of 2024 being well below the historical 8.1% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.1% 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 Playtika Holding.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Playtika Holding. 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. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Playtika Holding going out to 2026, 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 3 warning signs with Playtika Holding , and understanding these 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.