One of the biggest stories of last week was how Playtika Holding Corp. (NASDAQ:PLTK) shares plunged 28% in the week since its latest second-quarter results, closing yesterday at US$2.94. Revenue of US$731m surpassed estimates by 2.5%, although statutory earnings per share missed badly, coming in 25% below expectations at US$0.13 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Following last week's earnings report, Playtika Holding's eleven analysts are forecasting 2026 revenues to be US$2.79b, approximately in line with the last 12 months. Playtika Holding is also expected to turn profitable, with statutory earnings of US$0.40 per share. Before this earnings report, the analysts had been forecasting revenues of US$2.81b and earnings per share (EPS) of US$0.48 in 2026. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$5.00, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Playtika Holding analyst has a price target of US$14.00 per share, while the most pessimistic values it at US$3.50. 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. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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 3.0% annualised decline to the end of 2026. That is a notable change from historical growth of 1.5% 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 8.2% per year. It's pretty clear that Playtika Holding's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Playtika Holding. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$5.00, 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. At Simply Wall St, we have a full range of analyst estimates for Playtika Holding going out to 2028, and you can see them free on our platform here..

Even so, be aware that Playtika Holding is showing 2 warning signs in our investment analysis , and 1 of those is concerning...

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.