Yahoo Finance News Flash: 6 Analysts Think Perion Network Ltd. (NASDAQ:PERI) Earnings Are Under Threat
Today is shaping up negative for Perion Network Ltd. (NASDAQ:PERI) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, the current consensus, from the six analysts covering Perion Network, is for revenues of US$500m in 2024, which would reflect a painful 34% reduction in Perion Network's sales over the past 12 months. Statutory earnings per share are supposed to plunge 82% to US$0.40 in the same period. Previously, the analysts had been modelling revenues of US$601m and earnings per share (EPS) of US$0.92 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.
View our latest analysis for Perion Network
It'll come as no surprise then, to learn that the analysts have cut their price target 38% to US$9.67.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Perion Network's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 42% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 26% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.4% annually for the foreseeable future. It's pretty clear that Perion Network's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Perion Network. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Perion Network.
That said, the analysts might have good reason to be negative on Perion Network, given dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other warning signs we've identified.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
