Will Perfect World Beat These Analyst Estimates?

Perfect World (Nasdaq: PWRD  ) is expected to report Q4 earnings around Feb. 25. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Perfect World's revenues will contract -11.1% and EPS will compress -46.7%.

The average estimate for revenue is $109.1 million. On the bottom line, the average EPS estimate is $0.48.

Revenue details
Last quarter, Perfect World tallied revenue of $110.7 million. GAAP reported sales were 0.4% lower than the prior-year quarter's $111.1 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, non-GAAP EPS came in at $0.34. GAAP EPS of $0.28 for Q3 were 38% lower than the prior-year quarter's $0.45 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 81.5%, 140 basis points worse than the prior-year quarter. Operating margin was 15.7%, 1,160 basis points worse than the prior-year quarter. Net margin was 12.4%, 790 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $448.3 million. The average EPS estimate is $2.09.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 478 members out of 512 rating the stock outperform, and 34 members rating it underperform. Among 101 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 93 give Perfect World a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Perfect World is outperform, with an average price target of $15.17.

Software and computerized services are being consumed in radically different ways, on new and increasingly mobile devices. Many old leaders will be left behind. Whether or not Perfect World makes the coming cut, you should check out the company that Motley Fool analysts expect to lead the pack in "The Next Trillion-dollar Revolution." Click here for instant access to this free report.

• Add Perfect World to My Watchlist.