Playtika Holding Corp. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
The investors in Playtika Holding Corp.'s (NASDAQ:PLTK) will be rubbing their hands together with glee today, after the share price leapt 23% to US$2.44 in the week following its quarterly results. It looks like a pretty bad result, all things considered. Although revenues of US$674m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 51% to hit US$0.11 per share. 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.
Taking into account the latest results, Playtika Holding's eleven analysts currently expect revenues in 2027 to be US$2.78b, approximately in line with the last 12 months. Playtika Holding is also expected to turn profitable, with statutory earnings of US$0.63 per share. In the lead-up to this report, the analysts had been modelling revenues of US$2.78b and earnings per share (EPS) of US$0.65 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
Check out our latest analysis for Playtika Holding
It might be a surprise to learn that the consensus price target was broadly unchanged at US$4.54, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. There are some variant perceptions on Playtika Holding, with the most bullish analyst valuing it at US$14.00 and the most bearish at US$2.75 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. 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.
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 revenue is expected to reverse, with a forecast 1.4% annualised decline to the end of 2027. That is a notable change from historical growth of 1.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.1% annually for the foreseeable future. It's pretty clear that Playtika Holding's revenues are expected to perform substantially worse than 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Playtika Holding going out to 2028, 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 Playtika Holding that you need to be mindful of.
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