Yahoo Finance The Consensus EPS Estimates For HomeStreet, Inc. (NASDAQ:HMST) Just Fell Dramatically
The analysts covering HomeStreet, Inc. (NASDAQ:HMST) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the latest downgrade, the current consensus, from the four analysts covering HomeStreet, is for revenues of US$272m in 2023, which would reflect a measurable 6.3% reduction in HomeStreet's sales over the past 12 months. Statutory earnings per share are supposed to nosedive 36% to US$2.28 in the same period. Prior to this update, the analysts had been forecasting revenues of US$302m and earnings per share (EPS) of US$3.68 in 2023. The forecasts seem less optimistic after the new consensus numbers, with lower sales estimates and making a large cut to earnings per share forecasts.
See our latest analysis for HomeStreet
The consensus price target fell 8.9% to US$28.25, with the weaker earnings outlook clearly leading analyst valuation estimates. 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. There are some variant perceptions on HomeStreet, with the most bullish analyst valuing it at US$38.00 and the most bearish at US$24.00 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 6.3% by the end of 2023. This indicates a significant reduction from annual growth of 4.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.5% annually for the foreseeable future. It's pretty clear that HomeStreet's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for HomeStreet. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that HomeStreet's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of HomeStreet.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for HomeStreet going out to 2024, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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