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Marcus & Millichap, Inc. (NYSE:MMI) defied analyst predictions to release its yearly results, which were ahead of market expectations. The company beat expectations with revenues of US$806m arriving 2.6% ahead of forecasts. Statutory earnings per share (EPS) were US$1.95, 2.1% ahead of estimates. 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. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Marcus & Millichap from sole analyst is for revenues of US$851.0m in 2020, which is a credible 5.5% increase on its sales over the past 12 months. Statutory earnings per share are expected to accumulate 5.0% to US$2.05. In the lead-up to this report, analysts had been modelling revenues of US$831.5m and earnings per share (EPS) of US$2.05 in 2020. There doesn't appear to have been a major change in analyst sentiment following the results, other than the small lift in revenue estimates.
Even though revenue forecasts increased, the consensus price target 11% to US$39.00, perhaps suggesting that analysts have become more pessimistic about the lack of earnings growth.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. Next year brings more of the same, according to analysts, with revenue forecast to grow 5.5%, in line with its 5.6% 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 8.9% per year. So although Marcus & Millichap is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider market. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Marcus & Millichap going out as far as 2021, and you can see them free on our platform here.
We also provide an overview of the Marcus & Millichap Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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