There's been a notable change in appetite for Perfect Corp. (NYSE:PERF) shares in the week since its third-quarter report, with the stock down 14% to US$2.49. It was overall a positive result, with revenues beating expectations by 4.8% to hit US$15m. Perfect also reported a statutory profit of US$0.03, which was a nice improvement from the loss that the analysts were predicting. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Perfect
Taking into account the latest results, the current consensus from Perfect's three analysts is for revenues of US$61.4m in 2024. This would reflect a huge 22% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 97% to US$0.04. Before this earnings announcement, the analysts had been modelling revenues of US$63.0m and losses of US$0.01 per share in 2024. So it's pretty clear the analysts have mixed opinions on Perfect after this update; revenues were downgraded and per-share losses expected to increase.
The average price target fell 26% to US$3.75, implicitly signalling that lower earnings per share are a leading indicator for Perfect's valuation. 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 Perfect, with the most bullish analyst valuing it at US$4.50 and the most bearish at US$3.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. We would highlight that Perfect's revenue growth is expected to slow, with the forecast 17% annualised growth rate until the end of 2024 being well below the historical 22% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% per year. Even after the forecast slowdown in growth, it seems obvious that Perfect is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Perfect. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Perfect's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Perfect going out to 2025, and you can see them free on our platform here.
You can also see our analysis of Perfect's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.