Grid Dynamics Holdings, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) released its yearly result to the market. The early response was not positive, with shares down 5.1% to US$21.37 in the past week. It looks like a credible result overall - although revenues of US$351m were what the analysts expected, Grid Dynamics Holdings surprised by delivering a (statutory) profit of US$0.05 per share, an impressive 52% above what was 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.

See our latest analysis for Grid Dynamics Holdings

After the latest results, the four analysts covering Grid Dynamics Holdings are now predicting revenues of US$426.1m in 2025. If met, this would reflect a substantial 22% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 168% to US$0.13. Before this earnings report, the analysts had been forecasting revenues of US$409.4m and earnings per share (EPS) of US$0.14 in 2025. So it's pretty clear consensus is mixed on Grid Dynamics Holdings after the latest results; whilethe analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.

Curiously, the consensus price target rose 12% to US$24.00. 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. There are some variant perceptions on Grid Dynamics Holdings, with the most bullish analyst valuing it at US$30.00 and the most bearish at US$18.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Grid Dynamics Holdings shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 22% growth on an annualised basis. That is in line with its 24% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.5% per year. So it's pretty clear that Grid Dynamics Holdings is forecast to grow substantially faster than its industry.

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. Happily, they also upgraded their revenue estimates, and are forecasting them 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.

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. We have estimates - from multiple Grid Dynamics Holdings analysts - going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Grid Dynamics Holdings that you need to take into consideration.

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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.