Sapiens International Corporation N.V. (NASDAQ:SPNS) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Sapiens International missed analyst forecasts, with revenues of US$137m and statutory earnings per share (EPS) of US$0.33, falling short by 2.3% and 6.6% respectively. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Sapiens International

Taking into account the latest results, the consensus forecast from Sapiens International's four analysts is for revenues of US$558.5m in 2025. This reflects a credible 3.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to step up 12% to US$1.44. In the lead-up to this report, the analysts had been modelling revenues of US$591.5m and earnings per share (EPS) of US$1.53 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 consensus price target fell 15% to US$31.75, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Sapiens International analyst has a price target of US$36.00 per share, while the most pessimistic values it at US$26.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. It's pretty clear that there is an expectation that Sapiens International's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.9% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Sapiens International.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sapiens International. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than 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 Sapiens International's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Sapiens International analysts - going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.