There's been a major selloff in Ping Identity Holding Corp. (NYSE:PING) shares in the week since it released its annual report, with the stock down 35% to US$23.43. Revenues of US$244m came in a modest 2.2% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of US$0.15 coming in a substantial 32% smaller than what the analysts had expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Ping Identity Holding's 13 analysts are now forecasting revenues of US$260.8m in 2021. This would be a satisfactory 7.1% improvement in sales compared to the last 12 months. Losses are forecast to balloon 143% to US$0.36 per share. Before this latest report, the consensus had been expecting revenues of US$288.9m and US$0.25 per share in losses. While this year's revenue estimates dropped there was also a regrettable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
There was no major change to the consensus price target of US$33.82, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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. Currently, the most bullish analyst values Ping Identity Holding at US$40.00 per share, while the most bearish prices it at US$25.50. 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.
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 pretty clear that there is an expectation that Ping Identity Holding's revenue growth will slow down substantially, with revenues next year expected to grow 7.1%, compared to a historical growth rate of 12% over the past three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 13% next year. Factoring in the forecast slowdown in growth, it seems obvious that Ping Identity Holding is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Ping Identity Holding. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$33.82, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Ping Identity Holding going out to 2023, and you can see them free on our platform here.
Even so, be aware that Ping Identity Holding is showing 4 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...
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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