One of the biggest stories of last week was how Playtika Holding Corp. (NASDAQ:PLTK) shares plunged 24% in the week since its latest yearly results, closing yesterday at US$5.28. Statutory earnings per share fell badly short of expectations, coming in at US$0.44, some 34% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$2.5b. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Playtika Holding after the latest results.

Check out our latest analysis for Playtika Holding

After the latest results, the twelve analysts covering Playtika Holding are now predicting revenues of US$2.80b in 2025. If met, this would reflect a meaningful 10% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 31% to US$0.57. Before this earnings report, the analysts had been forecasting revenues of US$2.75b and earnings per share (EPS) of US$0.74 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.

The average price target fell 12% to US$8.57, with reduced earnings forecasts clearly tied to a lower valuation estimate. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Playtika Holding, with the most bullish analyst valuing it at US$16.00 and the most bearish at US$6.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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. It's clear from the latest estimates that Playtika Holding's rate of growth is expected to accelerate meaningfully, with the forecast 10% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.3% annually. Playtika Holding is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Playtika Holding's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Playtika Holding. 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 Playtika Holding going out to 2027, and you can see them free on our platform here..

Even so, be aware that Playtika Holding is showing 4 warning signs in our investment analysis , 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.