Earnings Beat: Exchange Income Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a good week for Exchange Income Corporation (TSE:EIF) shareholders, because the company has just released its latest third-quarter results, and the shares gained 2.4% to CA$55.87. Results look mixed - while revenue fell marginally short of analyst estimates at CA$710m, statutory earnings beat expectations 6.3%, with Exchange Income reporting profits of CA$1.18 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Exchange Income after the latest results.

View our latest analysis for Exchange Income

Following the latest results, Exchange Income's ten analysts are now forecasting revenues of CA$2.97b in 2025. This would be a meaningful 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 51% to CA$3.87. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$2.95b and earnings per share (EPS) of CA$3.84 in 2025. 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at CA$67.65. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Exchange Income at CA$74.00 per share, while the most bearish prices it at CA$62.50. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. It's pretty clear that there is an expectation that Exchange Income's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 10% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.1% annually. Even after the forecast slowdown in growth, it seems obvious that Exchange Income is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at CA$67.65, with the latest estimates not enough to have an impact on their price targets.

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 Exchange Income going out to 2026, 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 2 warning signs with Exchange Income , and understanding these should be part of your investment process.

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

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.