Yahoo Finance Results: Pason Systems Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
The first-quarter results for Pason Systems Inc. (TSE:PSI) were released last week, making it a good time to revisit its performance. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at CA$105m, statutory earnings beat expectations by a notable 178%, coming in at CA$0.87 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Pason Systems after the latest results.
See our latest analysis for Pason Systems
Taking into account the latest results, the most recent consensus for Pason Systems from six analysts is for revenues of CA$433.5m in 2024. If met, it would imply a solid 15% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to decrease 8.6% to CA$1.51 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$437.8m and earnings per share (EPS) of CA$1.33 in 2024. Although the revenue estimates have not really changed, we can see there's been a substantial gain in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The consensus price target was unchanged at CA$18.86, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. Currently, the most bullish analyst values Pason Systems at CA$21.00 per share, while the most bearish prices it at CA$15.00. 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 Pason Systems shareholders.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Pason Systems' rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 7.6% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 9.6% per year. So it's clear with the acceleration in growth, Pason Systems is expected to grow meaningfully faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Pason Systems' earnings potential next year. Fortunately, they also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Their estimates also suggest that Pason Systems' revenue is expected to perform better than the wider industry. The consensus price target held steady at CA$18.86, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Pason Systems. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Pason Systems going out to 2025, 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 Pason Systems (1 shouldn't be ignored!) 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.
