Analysts Are Updating Their Paycor HCM, Inc. (NASDAQ:PYCR) Estimates After Its Third-Quarter Results

Paycor HCM, Inc. (NASDAQ:PYCR) shareholders are probably feeling a little disappointed, since its shares fell 8.2% to US$22.83 in the week after its latest third-quarter results. Revenues of US$123m beat expectations by a respectable 4.2%, although statutory losses per share increased. Paycor HCM lost US$0.10, which was 34% more than what the analysts had included in their models. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Paycor HCM

Following the latest results, Paycor HCM's 14 analysts are now forecasting revenues of US$490.5m in 2023. This would be a huge 21% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 47% to US$0.39. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$478.7m and losses of US$0.38 per share in 2023. So it's pretty clear consensus is mixed on Paycor HCM after the new consensus numbers; while the analysts lifted revenue numbers, they also administered a modest increase to per-share loss expectations.

There was no major change to the consensus price target of US$32.71, with growing revenues seemingly enough to offset the concern of growing losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Paycor HCM analyst has a price target of US$42.00 per share, while the most pessimistic values it at US$24.00. 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 Paycor HCM shareholders.

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. It's clear from the latest estimates that Paycor HCM's rate of growth is expected to accelerate meaningfully, with the forecast 16% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 11% p.a. 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. Paycor HCM is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Paycor HCM. They also upgraded their revenue forecasts, although the latest estimates suggest that Paycor HCM will grow in line with the overall industry. The consensus price target held steady at US$32.71, 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. At Simply Wall St, we have a full range of analyst estimates for Paycor HCM going out to 2024, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Paycor HCM 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.