1st Source Corporation Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

As you might know, 1st Source Corporation (NASDAQ:SRCE) recently reported its yearly numbers. Revenues missed the mark, coming in 11% below forecasts, at US$289m. Statutory profits were better overall though, with per-share profits of US$3.17 being a notable 11% above what the analysts were modelling. 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.

See our latest analysis for 1st Source

Taking into account the latest results, the current consensus from 1st Source's three analysts is for revenues of US$319.3m in 2021, which would reflect a meaningful 10% increase on its sales over the past 12 months. Statutory earnings per share are forecast to decrease 6.7% to US$2.79 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$319.3m and earnings per share (EPS) of US$2.79 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 7.4% to US$43.67. It looks as though they previously had some doubts over whether the business would live up to their 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. The most optimistic 1st Source analyst has a price target of US$47.00 per share, while the most pessimistic values it at US$42.00. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that 1st Source's rate of growth is expected to accelerate meaningfully, with the forecast 10% revenue growth noticeably faster than its historical growth of 4.8%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that 1st Source is expected to grow much faster than its 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. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on 1st Source. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple 1st Source analysts - going out to 2022, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with 1st Source .

When trading 1st Source or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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