The Victory Capital Holdings, Inc. (NASDAQ:VCTR) Annual Results Are Out And Analysts Have Published New Forecasts
It's been a good week for Victory Capital Holdings, Inc. (NASDAQ:VCTR) shareholders, because the company has just released its latest full-year results, and the shares gained 7.1% to US$36.77. Victory Capital Holdings reported in line with analyst predictions, delivering revenues of US$821m and statutory earnings per share of US$3.12, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Victory Capital Holdings
Taking into account the latest results, the consensus forecast from Victory Capital Holdings' nine analysts is for revenues of US$877.8m in 2024. This reflects a reasonable 6.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 15% to US$3.80. In the lead-up to this report, the analysts had been modelling revenues of US$858.0m and earnings per share (EPS) of US$3.98 in 2024. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a reasonable to revenue, the consensus also made a minor downgrade to its earnings per share forecasts.
There's been no major changes to the price target of US$41.56, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. 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. The most optimistic Victory Capital Holdings analyst has a price target of US$55.00 per share, while the most pessimistic values it at US$28.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. It's pretty clear that there is an expectation that Victory Capital Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.9% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.8% annually. Factoring in the forecast slowdown in growth, it looks like Victory Capital Holdings is forecast to grow at about the same rate as 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. 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. 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.
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. We have estimates - from multiple Victory Capital Holdings analysts - going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Victory Capital Holdings 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.
