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Shareholders of Pason Systems Inc. (TSE:PSI) will be pleased this week, given that the stock price is up 12% to CA$15.03 following its latest third-quarter results. Revenues were CA$106m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of CA$0.30 were also better than expected, beating analyst predictions by 14%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Pason Systems
Taking into account the latest results, the current consensus from Pason Systems' five analysts is for revenues of CA$443.3m in 2025. This would reflect a solid 11% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to fall 17% to CA$1.18 in the same period. Before this earnings report, the analysts had been forecasting revenues of CA$452.6m and earnings per share (EPS) of CA$1.25 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
The analysts made no major changes to their price target of CA$18.20, suggesting the downgrades are not expected to have a long-term impact on Pason Systems' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Pason Systems analyst has a price target of CA$20.00 per share, while the most pessimistic values it at CA$17.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Pason Systems is an easy business to forecast or the the analysts are all using similar assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Pason Systems' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Pason Systems' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.6% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.0% per year. Even after the forecast slowdown in growth, it seems obvious that Pason Systems is also expected to grow faster than the wider industry.