Industry Analysts Just Upgraded Their WSFS Financial Corporation (NASDAQ:WSFS) Revenue Forecasts By 13%

WSFS Financial Corporation (NASDAQ:WSFS) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that WSFS Financial will make substantially more sales than they'd previously expected.

Following the latest upgrade, WSFS Financial's three analysts currently expect revenues in 2022 to be US$743m, approximately in line with the last 12 months. Statutory earnings per share are presumed to leap 32% to US$3.63. Previously, the analysts had been modelling revenues of US$654m and earnings per share (EPS) of US$3.51 in 2022. The most recent forecasts are noticeably more optimistic, with a substantial gain in revenue estimates and a lift to earnings per share as well.

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Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$54.00, suggesting that the forecast performance does not have a long term impact on the company's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values WSFS Financial at US$58.00 per share, while the most bearish prices it at US$50.00. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

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 pretty clear that there is an expectation that WSFS Financial's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 4.0% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.6% annually. Factoring in the forecast slowdown in growth, it looks like WSFS Financial is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at WSFS Financial.

Better yet, our automated discounted cash flow calculation (DCF) suggests WSFS Financial could be moderately undervalued. You can learn more about our valuation methodology on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.