As you might know, Home Bancshares, Inc. (Conway, AR) (NASDAQ:HOMB) just kicked off its latest quarterly results with some very strong numbers. Results were good overall, with revenues beating analyst predictions by 2.8% to hit US$178m. Statutory earnings per share (EPS) came in at US$0.42, some 7.3% above whatthe 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from Home Bancshares (Conway AR)'s seven analysts is for revenues of US$656.6m in 2021, which would reflect a decent 16% improvement in sales compared to the last 12 months. Per-share earnings are expected to step up 17% to US$1.46. In the lead-up to this report, the analysts had been modelling revenues of US$653.7m and earnings per share (EPS) of US$1.42 in 2021. So the consensus seems to have become somewhat more optimistic on Home Bancshares (Conway AR)'s earnings potential following these results.
There's been no major changes to the consensus price target of US$18.63, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Home Bancshares (Conway AR) analyst has a price target of US$19.00 per share, while the most pessimistic values it at US$17.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Home Bancshares (Conway AR)'s growth to accelerate, with the forecast 16% growth ranking favourably alongside historical growth of 9.6% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.5% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Home Bancshares (Conway AR) is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Home Bancshares (Conway AR)'s earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$18.63, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Home Bancshares (Conway AR). Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Home Bancshares (Conway AR) going out to 2022, and you can see them free on our platform here..
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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