It's been a good week for Perficient, Inc. (NASDAQ:PRFT) shareholders, because the company has just released its latest first-quarter results, and the shares gained 2.2% to US$65.61. Revenues were US$169m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.41, an impressive 24% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Perficient's seven analysts are now forecasting revenues of US$698.8m in 2021. This would be a solid 9.9% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to jump 56% to US$1.70. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$688.5m and earnings per share (EPS) of US$1.60 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target rose 5.1% to US$75.00, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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. The most optimistic Perficient analyst has a price target of US$80.00 per share, while the most pessimistic values it at US$68.00. This is a very narrow spread of estimates, implying either that Perficient is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. The analysts are definitely expecting Perficient's growth to accelerate, with the forecast 13% annualised growth to the end of 2021 ranking favourably alongside historical growth of 6.1% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 14% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Perficient is expected to grow at about the same rate as 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 Perficient's earnings potential next year. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall 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 Perficient. Long-term earnings power is much more important than next year's profits. We have forecasts for Perficient going out to 2023, and you can see them free on our platform here.
It is also worth noting that we have found 3 warning signs for Perficient that you need to take into consideration.
This article by Simply Wall St is general in nature. 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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