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A week ago, HomeStreet, Inc. (NASDAQ:HMST) came out with a strong set of annual numbers that could potentially lead to a re-rate of the stock. Results were good overall, with revenues beating analyst predictions by 4.4% to hit US$362m. Statutory earnings per share (EPS) came in at US$5.46, some 6.2% above whatthe analysts had expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for HomeStreet
Following the recent earnings report, the consensus from six analysts covering HomeStreet is for revenues of US$336.4m in 2022, implying a measurable 7.1% decline in sales compared to the last 12 months. Statutory earnings per share are forecast to decline 19% to US$4.65 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$332.2m and earnings per share (EPS) of US$4.76 in 2022. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at US$57.00, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values HomeStreet at US$63.00 per share, while the most bearish prices it at US$50.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business 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. We would also point out that the forecast 7.1% annualised revenue decline to the end of 2022 is roughly in line with the historical trend, which saw revenues shrink 8.4% annually over the past five years By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.9% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect HomeStreet to suffer worse than the wider industry.