Results: Huron Consulting Group Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts
Huron Consulting Group Inc. (NASDAQ:HURN) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 2.3% to hit US$205m. Huron Consulting Group also reported a statutory profit of US$0.50, which was an impressive 183% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Huron Consulting Group
Following the recent earnings report, the consensus from four analysts covering Huron Consulting Group is for revenues of US$877.8m in 2021, implying a measurable 2.8% decline in sales compared to the last 12 months. Huron Consulting Group is also expected to turn profitable, with statutory earnings of US$2.03 per share. In the lead-up to this report, the analysts had been modelling revenues of US$899.5m and earnings per share (EPS) of US$2.08 in 2021. 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.
Despite the cuts to forecast earnings, there was no real change to the US$61.00 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. Currently, the most bullish analyst values Huron Consulting Group at US$62.00 per share, while the most bearish prices it at US$60.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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 sales are expected to reverse, with the forecast 2.8% revenue decline a notable change from historical growth of 6.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.9% next year. It's pretty clear that Huron Consulting Group's revenues are expected to perform substantially worse 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Huron Consulting Group. 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 Huron Consulting Group going out to 2022, and you can see them free on our platform here..
Plus, you should also learn about the 1 warning sign we've spotted with Huron Consulting Group .
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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