Results: Robert Half International Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
The yearly results for Robert Half International Inc. (NYSE:RHI) were released last week, making it a good time to revisit its performance. Robert Half International reported US$5.1b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$2.70 beat expectations, being 6.0% higher than what the analysts 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Robert Half International after the latest results.
View our latest analysis for Robert Half International
Taking into account the latest results, the consensus forecast from Robert Half International's eleven analysts is for revenues of US$5.52b in 2021, which would reflect a meaningful 8.0% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 23% to US$3.35. In the lead-up to this report, the analysts had been modelling revenues of US$5.36b and earnings per share (EPS) of US$3.06 in 2021. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
It will come as no surprise to learn that the analysts have increased their price target for Robert Half International 6.4% to US$65.09on the back of these upgrades. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Robert Half International analyst has a price target of US$104 per share, while the most pessimistic values it at US$42.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Robert Half International's rate of growth is expected to accelerate meaningfully, with the forecast 8.0% revenue growth noticeably faster than its historical growth of 2.5%p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 7.3% per year. Robert Half International is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Robert Half International's earnings potential next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Robert Half International. 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 Robert Half International going out to 2023, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 2 warning signs for Robert Half International that you should be aware of.
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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