Earnings Beat: Pathward Financial, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
Last week, you might have seen that Pathward Financial, Inc. (NASDAQ:CASH) released its quarterly result to the market. The early response was not positive, with shares down 3.7% to US$53.29 in the past week. Revenues were US$165m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$1.68 were also better than expected, beating analyst predictions by 14%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Pathward Financial after the latest results.
View our latest analysis for Pathward Financial
Taking into account the latest results, the consensus forecast from Pathward Financial's three analysts is for revenues of US$731.3m in 2024. This reflects a decent 18% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 13% to US$6.36. Before this earnings report, the analysts had been forecasting revenues of US$719.7m and earnings per share (EPS) of US$6.40 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 13% to US$63.00. It looks as though they previously had some doubts over whether the business would live up to their expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Pathward Financial at US$67.00 per share, while the most bearish prices it at US$59.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Pathward Financial is an easy business to forecast or the the analysts are all using similar assumptions.
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 period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 14% growth on an annualised basis. That is in line with its 13% annual growth 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 revenues grow 4.4% per year. So it's pretty clear that Pathward Financial is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Pathward Financial going out to 2024, and you can see them free on our platform here.
You can also see our analysis of Pathward Financial's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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