Shareholders will be ecstatic, with their stake up 20% over the past week following Payoneer Global Inc.'s (NASDAQ:PAYO) latest quarterly results. It was a solid earnings report, with revenues and earnings both coming in very strong. Revenues were 13% higher than the analysts had forecast, at US$148m, while the company also delivered a surprise statutory profit, against analyst expectations of a loss. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the six analysts covering Payoneer Global are now predicting revenues of US$593.1m in 2022. If met, this would reflect a decent 8.4% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to leap 58% to US$0.03. Before this earnings announcement, the analysts had been modelling revenues of US$563.1m and losses of US$0.15 per share in 2022. So we can see there's been a pretty clear upgrade to expectations following the latest results, with a small increase to revenues expected to lead to profitability earlier than previously forecast.
It will come as no surprise to learn that the analysts have increased their price target for Payoneer Global 19% to US$8.50on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Payoneer Global analyst has a price target of US$10.00 per share, while the most pessimistic values it at US$7.50. 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.
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 Payoneer Global's revenue growth is expected to slow, with the forecast 18% annualised growth rate until the end of 2022 being well below the historical 38% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% annually. So it's pretty clear that, while Payoneer Global's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that the analysts now expect Payoneer Global to become profitable next year, compared to previous expectations that it would report a loss. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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 Payoneer Global going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - Payoneer Global has 4 warning signs (and 1 which can't be ignored) we think 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.
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