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TRI Pointe Group, Inc. Just Recorded A 40% EPS Beat: Here's What Analysts Are Forecasting Next

Simply Wall St
·4 min read

TRI Pointe Group, Inc. (NYSE:TPH) investors will be delighted, with the company turning in some strong numbers with its latest results. TRI Pointe Group delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting US$830m, some 13% above indicated. Statutory EPS were US$0.61, an impressive 40% ahead of forecasts. The 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on TRI Pointe Group after the latest results.

Check out our latest analysis for TRI Pointe Group

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Taking into account the latest results, the consensus forecast from TRI Pointe Group's eight analysts is for revenues of US$3.66b in 2021, which would reflect a solid 9.5% improvement in sales compared to the last 12 months. Per-share earnings are expected to swell 15% to US$2.47. In the lead-up to this report, the analysts had been modelling revenues of US$3.60b and earnings per share (EPS) of US$2.26 in 2021. So the consensus seems to have become somewhat more optimistic on TRI Pointe Group's earnings potential following these results.

The consensus price target rose 11% to US$23.64, suggesting that higher earnings estimates flow through to the stock's valuation as well. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on TRI Pointe Group, with the most bullish analyst valuing it at US$28.00 and the most bearish at US$17.50 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await TRI Pointe Group shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the TRI Pointe Group's past performance and to peers in the same industry. Next year brings more of the same, according to the analysts, with revenue forecast to grow 9.5%, in line with its 8.1% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 9.5% next year. It's clear that while TRI Pointe Group's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around TRI Pointe Group's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple TRI Pointe Group analysts - going out to 2022, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for TRI Pointe Group that we have uncovered.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.