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As you might know, NexPoint Residential Trust, Inc. (NYSE:NXRT) recently reported its yearly numbers. It was a credible result overall, with revenues of US$205m and statutory earnings per share of US$1.74 both in line with analyst estimates, showing that NexPoint Residential Trust is executing in line with expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on NexPoint Residential Trust after the latest results.
After the latest results, the seven analysts covering NexPoint Residential Trust are now predicting revenues of US$212.5m in 2021. If met, this would reflect an okay 3.7% improvement in sales compared to the last 12 months. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -US$0.91 per share in 2021. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$212.5m and losses of US$0.91 per share in 2021.
The consensus price target was unchanged at US$48.50, suggesting that the business - losses and all - is executing in line with estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values NexPoint Residential Trust at US$52.00 per share, while the most bearish prices it at US$43.00. 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 highlight that NexPoint Residential Trust's revenue growth is expected to slow, with forecast 3.7% increase next year well below the historical 11%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that NexPoint Residential Trust is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that NexPoint Residential Trust's revenues are expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for NexPoint Residential Trust going out to 2025, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 5 warning signs for NexPoint Residential Trust you should be aware of, and 2 of them make us uncomfortable.
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. 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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