HireRight Holdings Corporation Just Missed EPS By 76%: Here's What Analysts Think Will Happen Next
As you might know, HireRight Holdings Corporation (NYSE:HRT) recently reported its second-quarter numbers. Statutory earnings per share fell badly short of expectations, coming in at US$0.03, some 76% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$192m. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for HireRight Holdings
After the latest results, the consensus from HireRight Holdings' ten analysts is for revenues of US$726.3m in 2023, which would reflect a noticeable 3.6% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to nosedive 84% to US$0.24 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$728.9m and earnings per share (EPS) of US$0.44 in 2023. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.
The consensus price target held steady at US$12.16, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic HireRight Holdings analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$10.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would also point out that the forecast 7.0% annualised revenue decline to the end of 2023 is roughly in line with the historical trend, which saw revenues shrink 8.6% annually over the past year By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.0% per year. So while a broad number of companies are forecast to grow, unfortunately HireRight Holdings is expected to see its revenue affected worse than other companies in the industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for HireRight Holdings. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that HireRight Holdings' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$12.16, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on HireRight Holdings. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for HireRight Holdings going out to 2025, and you can see them free on our platform here..
It is also worth noting that we have found 2 warning signs for HireRight Holdings that you need to take into consideration.
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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.
