Analysts Have Been Trimming Their HireRight Holdings Corporation (NYSE:HRT) Price Target After Its Latest Report

Shareholders will be ecstatic, with their stake up 33% over the past week following HireRight Holdings Corporation's (NYSE:HRT) latest yearly results. The results don't look great, especially considering that statutory losses grew 260% toUS$0.18 per share. Revenues of US$730m did beat expectations by 2.2%, but it looks like a bit of a cold comfort. 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 HireRight Holdings

Taking into account the latest results, the consensus forecast from HireRight Holdings' nine analysts is for revenues of US$769.1m in 2022, which would reflect a modest 5.4% improvement in sales compared to the last 12 months. HireRight Holdings is also expected to turn profitable, with statutory earnings of US$0.58 per share. Before this earnings report, the analysts had been forecasting revenues of US$769.1m and earnings per share (EPS) of US$0.58 in 2022. 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.

The consensus price target fell 13% to US$22.06, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the annual results. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on HireRight Holdings, with the most bullish analyst valuing it at US$35.00 and the most bearish at US$20.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that HireRight Holdings' revenue growth is expected to slow, with the forecast 5.4% annualised growth rate until the end of 2022 being well below the historical 35% growth over the last year. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.7% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than HireRight Holdings.

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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that HireRight Holdings' revenues are expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of HireRight Holdings' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for HireRight Holdings going out to 2024, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for HireRight Holdings that you should be aware of.

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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.