The yearly results for PlayAGS, Inc. (NYSE:AGS) were released last week, making it a good time to revisit its performance. It looks like a pretty bad result, all things considered. Although revenues of US$357m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 84% to hit US$0.01 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for PlayAGS from five analysts is for revenues of US$370.0m in 2024. If met, it would imply a satisfactory 3.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 2,988% to US$0.31. In the lead-up to this report, the analysts had been modelling revenues of US$365.3m and earnings per share (EPS) of US$0.34 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
Despite cutting their earnings forecasts,the analysts have lifted their price target 6.6% to US$13.00, suggesting that these impacts are not expected to weigh on the stock's value in the long term. 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 PlayAGS, with the most bullish analyst valuing it at US$14.00 and the most bearish at US$12.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 3.8% growth on an annualised basis. That is in line with its 4.6% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.6% per year. So although PlayAGS is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for PlayAGS. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that PlayAGS' revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for PlayAGS going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 3 warning signs for PlayAGS (of which 1 is significant!) 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.