Earnings Miss: Mainstreet Equity Corp. Missed EPS And Analysts Are Revising Their Forecasts

It's been a good week for Mainstreet Equity Corp. (TSE:MEQ) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.3% to CA$190. Things were not great overall, with a surprise (statutory) loss of CA$1.70 per share on revenues of CA$63m, even though the analysts had been expecting a profit. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Mainstreet Equity

After the latest results, the twin analysts covering Mainstreet Equity are now predicting revenues of CA$275.3m in 2025. If met, this would reflect a solid 15% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to crater 38% to CA$8.32 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CA$269.0m and earnings per share (EPS) of CA$8.07 in 2025. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.1% to CA$218per share.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 12% growth on an annualised basis. That is in line with its 11% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 7.6% annually. So it's pretty clear that Mainstreet Equity is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Mainstreet Equity following these results. Happily, they also upgraded their revenue estimates, and are forecasting them 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. We have analyst estimates for Mainstreet Equity going out as far as 2025, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Mainstreet Equity (at least 2 which are significant) , and understanding these should be part of your investment process.

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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.

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