FirstCash Holdings, Inc Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

As you might know, FirstCash Holdings, Inc (NASDAQ:FCFS) recently reported its annual numbers. FirstCash Holdings reported US$2.7b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$5.36 beat expectations, being 5.0% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for FirstCash Holdings

Taking into account the latest results, the current consensus from FirstCash Holdings' five analysts is for revenues of US$2.99b in 2023, which would reflect a solid 9.6% increase on its sales over the past 12 months. Statutory earnings per share are predicted to rise 2.4% to US$5.60. In the lead-up to this report, the analysts had been modelling revenues of US$2.99b and earnings per share (EPS) of US$5.87 in 2023. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at US$102, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values FirstCash Holdings at US$120 per share, while the most bearish prices it at US$90.00. This is a very narrow spread of estimates, implying either that FirstCash Holdings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting FirstCash Holdings' growth to accelerate, with the forecast 9.6% annualised growth to the end of 2023 ranking favourably alongside historical growth of 4.6% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 9.6% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that FirstCash Holdings is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for FirstCash Holdings. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$102, with the latest estimates not enough to have an impact on their price targets.

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 FirstCash Holdings going out to 2025, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 4 warning signs for FirstCash 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.