A week ago, P10, Inc. (NYSE:PX) came out with a strong set of second-quarter numbers that could potentially lead to a re-rate of the stock. The company beat forecasts, with revenue of US$71m, some 7.9% above estimates, and statutory earnings per share (EPS) coming in at US$0.06, 50% ahead of expectations. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from P10's six analysts is for revenues of US$274.0m in 2024. This reflects an okay 5.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 744% to US$0.19. In the lead-up to this report, the analysts had been modelling revenues of US$268.6m and earnings per share (EPS) of US$0.16 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice gain to earnings per share in particular.
It will come as no surprise to learn that the analysts have increased their price target for P10 6.3% to US$10.79on the back of these upgrades. 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. There are some variant perceptions on P10, with the most bullish analyst valuing it at US$13.00 and the most bearish at US$9.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that P10's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2024 being well below the historical 33% 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) 5.2% per year. Even after the forecast slowdown in growth, it seems obvious that P10 is also expected to grow 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 P10's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster 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.
With that in mind, we wouldn't be too quick to come to a conclusion on P10. 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 P10 going out to 2026, and you can see them free on our platform here..
Before you take the next step you should know about the 3 warning signs for P10 (1 is significant!) that we have uncovered.
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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.