Mr. Cooper Group Inc. Just Beat EPS By 150%: Here's What Analysts Think Will Happen Next
Mr. Cooper Group Inc. (NASDAQ:COOP) investors will be delighted, with the company turning in some strong numbers with its latest results. Statutory revenue and earnings both blasted past expectations, with revenue of US$1.3b beating expectations by 39% and earnings per share (EPS) reaching US$5.92, some 150% ahead of expectations. 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 Mr. Cooper Group
Taking into account the latest results, the four analysts covering Mr. Cooper Group provided consensus estimates of US$3.15b revenue in 2021, which would reflect a definite 15% decline on its sales over the past 12 months. Statutory earnings per share are forecast to plummet 46% to US$6.13 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$3.18b and earnings per share (EPS) of US$6.13 in 2021. 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.
The analysts reconfirmed their price target of US$40.57, showing that the business is executing well and in line with expectations. 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. There are some variant perceptions on Mr. Cooper Group, with the most bullish analyst valuing it at US$45.00 and the most bearish at US$32.00 per share. 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.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 20% by the end of 2021. This indicates a significant reduction from annual growth of 66% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 5.1% per year. The forecasts do look bearish for Mr. Cooper Group, since they're expecting it to shrink faster than the industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also made no changes to their revenue estimates, implying the business is not expected to experience any major impacts to the sales trajectory in the near term, even though sales are expected to trail 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Mr. Cooper Group going out to 2023, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with Mr. Cooper Group (including 1 which shouldn't be ignored) .
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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