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US$31.60 - That's What Analysts Think BRP Group, Inc. (NASDAQ:BRP) Is Worth After These Results

Simply Wall St
·4 min read

It's been a good week for BRP Group, Inc. (NASDAQ:BRP) shareholders, because the company has just released its latest third-quarter results, and the shares gained 6.5% to US$31.90. Results overall weren't great; even though revenues of US$66m beat expectations by 13%, statutory losses ballooned to US$0.10 per share, substantially worse than the analysts had expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on BRP Group after the latest results.

View our latest analysis for BRP Group

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the consensus forecast from BRP Group's six analysts is for revenues of US$405.4m in 2021, which would reflect a huge 95% improvement in sales compared to the last 12 months. BRP Group is also expected to turn profitable, with statutory earnings of US$0.23 per share. In the lead-up to this report, the analysts had been modelling revenues of US$395.6m and earnings per share (EPS) of US$0.25 in 2021. While next year's revenue estimates increased, there was also a substantial drop in EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

The analysts also upgraded BRP Group's price target 17% to US$31.60, implying that the higher sales are expected to generate enough value to offset the forecast decline in earnings. 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 BRP Group analyst has a price target of US$34.00 per share, while the most pessimistic values it at US$29.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting BRP Group is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the BRP Group's past performance and to peers in the same industry. The analysts are definitely expecting BRP Group's growth to accelerate, with the forecast 95% growth ranking favourably alongside historical growth of 47% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.3% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that BRP Group is expected to grow much faster than its 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. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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. At Simply Wall St, we have a full range of analyst estimates for BRP Group going out to 2024, and you can see them free on our platform here..

You still need to take note of risks, for example - BRP Group has 2 warning signs we think 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.

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