Earnings Beat: Enact Holdings, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

The quarterly results for Enact Holdings, Inc. (NASDAQ:ACT) were released last week, making it a good time to revisit its performance. It looks like a credible result overall - although revenues of US$270m were in line with what the analysts predicted, Enact Holdings surprised by delivering a statutory profit of US$1.01 per share, a notable 17% above expectations. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Enact Holdings

Following last week's earnings report, Enact Holdings' six analysts are forecasting 2022 revenues to be US$1.10b, approximately in line with the last 12 months. Statutory earnings per share are forecast to shrink 2.8% to US$3.50 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.10b and earnings per share (EPS) of US$3.45 in 2022. 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.

The analysts reconfirmed their price target of US$25.86, showing that the business is executing well and in line with expectations. 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 Enact Holdings, with the most bullish analyst valuing it at US$28.00 and the most bearish at US$24.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's also worth noting that the years of declining sales look to have come to an end, with the forecast for flat revenues to the end of 2022. Historically, Enact Holdings' sales have shrunk approximately 3.1% annually over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 0.8% annually. Although Enact Holdings' revenues are expected to improve, it seems that it is still expected to grow slower 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 Enact Holdings' 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Enact Holdings going out to 2024, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Enact Holdings (1 is concerning!) that we have uncovered.

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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.