Yahoo Finance MGIC Investment Corporation (NYSE:MTG) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?
MGIC Investment Corporation (NYSE:MTG) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. MGIC Investment missed revenue estimates by 2.3%, coming in atUS$294m, although statutory earnings per share (EPS) of US$0.64 beat expectations, coming in 4.6% ahead of analyst estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for MGIC Investment
After the latest results, the four analysts covering MGIC Investment are now predicting revenues of US$1.21b in 2024. If met, this would reflect a reasonable 3.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to decrease 6.6% to US$2.54 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.22b and earnings per share (EPS) of US$2.47 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at US$22.44, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values MGIC Investment at US$24.00 per share, while the most bearish prices it at US$20.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that MGIC Investment's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 4.9% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.6% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.7% annually. Not only are MGIC Investment's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around MGIC Investment'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$22.44, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for MGIC Investment going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with MGIC Investment (including 1 which is a bit unpleasant) .
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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.
