Paymentus Holdings, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Shareholders in Paymentus Holdings, Inc. (NYSE:PAY) had a terrible week, as shares crashed 27% to US$21.21 in the week since its latest full-year results. It looks like a credible result overall - although revenues of US$396m were what the analysts expected, Paymentus Holdings surprised by delivering a (statutory) profit of US$0.06 per share, an impressive 114% above what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Paymentus Holdings

Taking into account the latest results, the consensus forecast from Paymentus Holdings' seven analysts is for revenues of US$493.1m in 2022, which would reflect a sizeable 25% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to crater 69% to US$0.018 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$483.9m and earnings per share (EPS) of US$0.072 in 2022. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$33.50, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Paymentus Holdings, with the most bullish analyst valuing it at US$39.00 and the most bearish at US$29.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Paymentus Holdings' revenue growth is expected to slow, with the forecast 25% annualised growth rate until the end of 2022 being well below the historical 31% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% per year. So it's pretty clear that, while Paymentus Holdings' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Paymentus Holdings. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$33.50, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Paymentus Holdings analysts - going out to 2024, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Paymentus Holdings that you need to be mindful of.

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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.