U.S. markets closed
  • S&P 500

    3,841.94
    +73.47 (+1.95%)
     
  • Dow 30

    31,496.30
    +572.20 (+1.85%)
     
  • Nasdaq

    12,920.15
    +196.65 (+1.55%)
     
  • Russell 2000

    2,192.21
    +45.29 (+2.11%)
     
  • Crude Oil

    66.28
    +0.19 (+0.29%)
     
  • Gold

    1,698.20
    -0.30 (-0.02%)
     
  • Silver

    25.30
    +0.01 (+0.03%)
     
  • EUR/USD

    1.1923
    -0.0056 (-0.47%)
     
  • 10-Yr Bond

    1.5540
    +0.0040 (+0.26%)
     
  • GBP/USD

    1.3835
    -0.0059 (-0.43%)
     
  • USD/JPY

    108.3380
    +0.3620 (+0.34%)
     
  • BTC-USD

    50,539.05
    +1,908.20 (+3.92%)
     
  • CMC Crypto 200

    982.93
    +39.75 (+4.21%)
     
  • FTSE 100

    6,630.52
    -20.36 (-0.31%)
     
  • Nikkei 225

    28,864.32
    -65.78 (-0.23%)
     

Washington Federal, Inc. (NASDAQ:WAFD) Second-Quarter Results: Here's What Analysts Are Forecasting For This Year

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·4 min read
  • Oops!
    Something went wrong.
    Please try again later.

Last week saw the newest second-quarter earnings release from Washington Federal, Inc. (NASDAQ:WAFD), an important milestone in the company's journey to build a stronger business. Revenues of US$134m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.49, missing estimates by 4.9%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Washington Federal

NasdaqGS:WAFD Past and Future Earnings April 27th 2020
NasdaqGS:WAFD Past and Future Earnings April 27th 2020

Following the recent earnings report, the consensus from four analysts covering Washington Federal is for revenues of US$541.7m in 2020, implying a small 7.1% decline in sales compared to the last 12 months. Statutory earnings per share are forecast to descend 18% to US$2.18 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$531.2m and earnings per share (EPS) of US$2.18 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of US$28.00, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Washington Federal, with the most bullish analyst valuing it at US$31.00 and the most bearish at US$25.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast revenue decline of 7.1%, a significant reduction from annual growth of 4.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 0.07% annually for the foreseeable future. It's pretty clear that Washington Federal's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Washington Federal's revenues are expected to 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.

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 forecasts for Washington Federal going out to 2021, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Washington Federal (1 doesn't sit too well with us!) that you need to be mindful of.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.