Tri Pointe Homes, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Investors in Tri Pointe Homes, Inc. (NYSE:TPH) had a good week, as its shares rose 2.5% to close at US$30.31 following the release of its first-quarter results. It looks like a credible result overall - although revenues of US$723m were what the analysts expected, Tri Pointe Homes surprised by delivering a (statutory) profit of US$0.70 per share, an impressive 43% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the consensus from Tri Pointe Homes' seven analysts is for revenues of US$3.55b in 2025, which would reflect a chunky 17% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to tumble 35% to US$3.05 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$3.77b and earnings per share (EPS) of US$3.11 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

View our latest analysis for Tri Pointe Homes

Despite the cuts to forecast earnings, there was no real change to the US$39.17 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Tri Pointe Homes analyst has a price target of US$43.00 per share, while the most pessimistic values it at US$37.00. This is a very narrow spread of estimates, implying either that Tri Pointe Homes is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. We would highlight that revenue is expected to reverse, with a forecast 23% annualised decline to the end of 2025. That is a notable change from historical growth of 5.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Tri Pointe Homes is expected to lag the wider 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Tri Pointe Homes going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Tri Pointe Homes .

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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.