HireQuest, Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's been a good week for HireQuest, Inc. (NASDAQ:HQI) shareholders, because the company has just released its latest quarterly results, and the shares gained 7.9% to US$22.21. Sales of US$9.9m surpassed estimates by 2.5%, although statutory earnings per share missed badly, coming in 31% below expectations at US$0.19 per share. 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 HireQuest

Taking into account the latest results, the most recent consensus for HireQuest from three analysts is for revenues of US$42.3m in 2023 which, if met, would be a huge 25% increase on its sales over the past 12 months. Statutory earnings per share are predicted to step up 14% to US$1.13. In the lead-up to this report, the analysts had been modelling revenues of US$42.2m and earnings per share (EPS) of US$1.31 in 2023. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

Despite cutting their earnings forecasts,the analysts have lifted their price target 13% to US$28.67, suggesting that these impacts are not expected to weigh on the stock's value in the long term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic HireQuest analyst has a price target of US$29.00 per share, while the most pessimistic values it at US$28.00. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of HireQuest'shistorical trends, as the 35% annualised revenue growth to the end of 2023 is roughly in line with the 33% annual revenue growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 7.4% annually. So it's pretty clear that HireQuest is forecast to grow substantially faster than its 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. 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.

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 estimates - from multiple HireQuest analysts - going out to 2025, and you can see them free on our platform here.

It might also be worth considering whether HireQuest's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.