Need To Know: The Consensus Just Cut Its HireQuest, Inc. (NASDAQ:HQI) Estimates For 2023

One thing we could say about the analysts on HireQuest, Inc. (NASDAQ:HQI) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After this downgrade, HireQuest's two analysts are now forecasting revenues of US$37m in 2023. This would be a modest 5.6% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to ascend 19% to US$0.94. Previously, the analysts had been modelling revenues of US$41m and earnings per share (EPS) of US$1.24 in 2023. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

See our latest analysis for HireQuest

The consensus price target fell 5.8% to US$27.00, with the weaker earnings outlook clearly leading analyst valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that HireQuest's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2023 being well below the historical 33% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.0% per year. Even after the forecast slowdown in growth, it seems obvious that HireQuest is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on HireQuest after today.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for HireQuest going out as far as 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.