Perdoceo Education Corporation (NASDAQ:PRDO) investors will be delighted, with the company turning in some strong numbers with its latest results. Perdoceo Education beat earnings, with revenues hitting US$168m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 13%. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Perdoceo Education after the latest results.
Following the recent earnings report, the consensus from sole analyst covering Perdoceo Education is for revenues of US$653.7m in 2024. This implies a measurable 4.2% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to dip 8.9% to US$2.12 in the same period. Yet prior to the latest earnings, the analyst had been anticipated revenues of US$650.9m and earnings per share (EPS) of US$2.04 in 2024. So the consensus seems to have become somewhat more optimistic on Perdoceo Education's earnings potential following these results.
The consensus price target rose 8.7% to US$25.00, suggesting that higher earnings estimates flow through to the stock's valuation as well.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 5.6% annualised decline to the end of 2024. That is a notable change from historical growth of 3.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Perdoceo Education is expected to lag 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 Perdoceo Education's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analyst clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
You still need to take note of risks, for example - Perdoceo Education has 3 warning signs (and 1 which doesn't sit too well with us) we think 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.