Procore Technologies (NYSE:PCOR) completed the most recent trading session at $56.19, up 1.3% over the previous four weeks, but if short-term price goals issued by Wall Street analysts are any indication, there could be plenty of upsides left in the company. The average price estimate of $74.85 represents a 33.2% increase in value.

The average consists of 13 short-term price projections ranging from $61 to $85, with a standard deviation of $6.12. While the lowest estimate predicts an 8.6% increase from the present price level, the most bullish forecast predicts a 51.3% increase. More than the range, the standard deviation should be noted here because it helps appreciate the unpredictability of the estimations. The lower the standard deviation, the higher the level of agreement among analysts.

While the consensus price goal is greatly sought after by investors, analysts’ ability and impartiality in setting price targets have long been called into question. And investors who base their investment decisions only on this instrument may be doing themselves a disservice.

However, a high consensus price target is not the sole indicator of probable upside in PCOR. This viewpoint is supported by analysts’ consensus that the company will generate higher earnings than previously projected. Though a positive trend in earnings estimate revisions does not indicate how much the stock could rise, it has shown to be beneficial in predicting an increase.

What You Need to Know About Analyst Price Targets

A price objective, according to academics at numerous universities across the world, is one of many pieces of information about a stock that misleads investors considerably more often than it guides. In fact, empirical evidence reveals that price goals issued by multiple experts, regardless of their level of agreement, rarely predict where the price of a company will end up.

While Wall Street analysts have extensive knowledge of a company’s fundamentals as well as its sensitivity to economic and industry challenges, many of them establish unduly optimistic price estimates. Are you curious as to why?

They frequently use this to generate interest in shares of companies with which their firms either have current commercial links or wish to be linked. In other words, the business motives of businesses covering a company frequently result in analysts setting exaggerated price targets.

A tight clustering of price goals, reflected by a low standard deviation, indicates that experts are in agreement regarding the direction and size of a stock’s price movement. While this does not guarantee that the company will reach the average price objective, it may be a good starting point for additional research targeted at finding relevant fundamental driving drivers.

While investors should not completely disregard price goals, making an investment decision primarily based on them may result in a disappointing ROI. As a result, price targets should always be viewed with caution.

Here’s Why PCOR Could Still Have Room to Grow

Analysts have recently become more optimistic about the company’s profits prospects, as evidenced by widespread agreement to raise EPS predictions. And it could be a valid reason to expect the stock to rise. After all, empirical evidence demonstrates a substantial relationship between changes in earnings estimate revisions and short-term stock price movements.

The Consensus Estimate for the current year has increased by 9.9% in the last 30 days, with seven estimates moving higher and no negative revisions.

As a result, while the consensus price goal may not be a realistic predictor of how much PCOR could gain, the price movement direction it implies appears to be a fair guide.

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