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Conifer Holdings, Inc. (NASDAQ:CNFR) Just Reported Earnings, And Analysts Cut Their Target Price

Simply Wall St

Conifer Holdings, Inc. (NASDAQ:CNFR) missed earnings with its latest first-quarter results, disappointing overly-optimistic forecasters. It was a pretty negative result overall, with revenues of US$22m missing analyst predictions by 7.5%. Worse, the business reported a statutory loss of US$0.49 per share, much larger than the analysts had forecast prior to the result. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Conifer Holdings

NasdaqGM:CNFR Past and Future Earnings May 15th 2020
NasdaqGM:CNFR Past and Future Earnings May 15th 2020

Following last week's earnings report, Conifer Holdings' twin analysts are forecasting 2020 revenues to be US$94.3m, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$91.1m and earnings per share (EPS) of US$0.11 in 2020. While they've upgraded their revenue numbers for next year, the consensus also expects losses to increase, perhaps due to the investments required to grow revenue. In any event, it's not clear that these new estimates are particularly bullish.

Spiting the revenue upgrading, the average price target fell 7.1% to US$3.25, clearly signalling that higher forecast losses are a valuation concern.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Conifer Holdings' past performance and to peers in the same industry. We would highlight that Conifer Holdings' revenue growth is expected to slow, with forecast 1.1% increase next year well below the historical 7.2%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.4% next year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Conifer Holdings.

The Bottom Line

The most important thing to take away is that the analysts are expecting Conifer Holdings to become unprofitable next year. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Conifer Holdings' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Conifer Holdings going out as far as 2021, and you can see them free on our platform here.

You still need to take note of risks, for example - Conifer Holdings has 4 warning signs (and 1 which can't be ignored) we think you should know about.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.