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

Investors in Provident Financial Holdings, Inc. (NASDAQ:PROV) had a good week, as its shares rose 4.1% to close at US$15.10 following the release of its second-quarter results. Revenues of US$9.6m fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of US$0.31 an impressive 22% ahead of estimates. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Provident Financial Holdings

Taking into account the latest results, the twin analysts covering Provident Financial Holdings provided consensus estimates of US$39.2m revenue in 2024, which would reflect a small 2.9% decline over the past 12 months. Statutory earnings per share are forecast to reduce 4.3% to US$1.10 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$40.0m and earnings per share (EPS) of US$1.28 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

What's most unexpected is that the consensus price target rose 19% to US$15.50, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing that stands out from these estimates is that revenues are expected to keep falling until the end of 2024, roughly in line with the historical decline of 5.9% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 5.6% per year. So while a broad number of companies are forecast to grow, unfortunately Provident Financial Holdings is expected to see its revenue affected worse than other companies in the 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

You can also view our analysis of Provident Financial Holdings' balance sheet, and whether we think Provident Financial Holdings is carrying too much debt, for free on our platform here.

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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.