Paya Holdings Inc. (NASDAQ:PAYA) Annual Results: Here's What Analysts Are Forecasting For This Year

Paya Holdings Inc. (NASDAQ:PAYA) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was an okay result overall, with revenues coming in at US$206m, roughly what the analysts had been expecting. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Paya Holdings after the latest results.

See our latest analysis for Paya Holdings

Taking into account the latest results, the consensus forecast from Paya Holdings' seven analysts is for revenues of US$238.7m in 2021, which would reflect a notable 16% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Paya Holdings forecast to report a statutory profit of US$0.04 per share. In the lead-up to this report, the analysts had been modelling revenues of US$238.0m and earnings per share (EPS) of US$0.12 in 2021. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

The consensus price target held steady at US$15.67, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on Paya Holdings, with the most bullish analyst valuing it at US$18.00 and the most bearish at US$15.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Paya Holdings' past performance and to peers in the same industry. The analysts are definitely expecting Paya Holdings' growth to accelerate, with the forecast 16% annualised growth to the end of 2021 ranking favourably alongside historical growth of 4.4% per annum over the past three years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 14% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Paya Holdings is expected to grow at about the same rate as the wider 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, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Paya Holdings. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Paya Holdings going out to 2024, and you can see them free on our platform here..

It might also be worth considering whether Paya Holdings' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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