Open Lending Corporation Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
The analysts might have been a bit too bullish on Open Lending Corporation (NASDAQ:LPRO), given that the company fell short of expectations when it released its annual results last week. Results showed a clear earnings miss, with US$117m revenue coming in 9.7% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.18 missed the mark badly, arriving some 31% below what was expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Open Lending
Taking into account the latest results, the most recent consensus for Open Lending from nine analysts is for revenues of US$127.1m in 2024. If met, it would imply a notable 8.2% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 40% to US$0.26. Before this earnings report, the analysts had been forecasting revenues of US$130.5m and earnings per share (EPS) of US$0.29 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.
The analysts made no major changes to their price target of US$8.17, suggesting the downgrades are not expected to have a long-term impact on Open Lending's valuation. 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. The most optimistic Open Lending analyst has a price target of US$10.00 per share, while the most pessimistic values it at US$6.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Open Lending's revenue growth is expected to slow, with the forecast 8.2% annualised growth rate until the end of 2024 being well below the historical 15% 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 6.5% annually. Even after the forecast slowdown in growth, it seems obvious that Open Lending is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded Open Lending's revenue estimates, but industry data suggests that it is expected to grow faster 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Open Lending analysts - going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Open Lending that you should be aware of.
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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.
