Pason Systems Inc. (TSE:PSI) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory forecasts. The revenue forecast for next year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

After this upgrade, Pason Systems' six analysts are now forecasting revenues of CA$422m in 2024. This would be a notable 14% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to reduce 9.7% to CA$1.42 in the same period. Prior to this update, the analysts had been forecasting revenues of CA$376m and earnings per share (EPS) of CA$1.38 in 2024. Sentiment certainly seems to have improved in recent times, with a nice gain to revenue and a small lift in earnings per share estimates.

View our latest analysis for Pason Systems  earnings-and-revenue-growth

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$18.14, suggesting that the forecast performance does not have a long term impact on the company's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Pason Systems' rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.6% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 11% per year. So it's clear with the acceleration in growth, Pason Systems is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for next year, expecting improving business conditions. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Pason Systems.



These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential warning sign with Pason Systems, including concerns around earnings quality. You can learn more, and  discover the 1 other warning sign we've identified, for free on our platform here.

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