Focus Financial Partners Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Focus Financial Partners Inc. (NASDAQ:FOCS) defied analyst predictions to release its second-quarter results, which were ahead of market expectations. The company beat both earnings and revenue forecasts, with revenue of US$539m, some 2.8% above estimates, and statutory earnings per share (EPS) coming in at US$0.50, 40% ahead of expectations. 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. 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 Focus Financial Partners

Taking into account the latest results, the current consensus from Focus Financial Partners' nine analysts is for revenues of US$2.14b in 2022, which would reflect a modest 4.0% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 50% to US$1.62. Before this earnings report, the analysts had been forecasting revenues of US$2.14b and earnings per share (EPS) of US$1.17 in 2022. Although the revenue estimates have not really changed, we can see there's been a massive increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

There's been no major changes to the consensus price target of US$57.67, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Focus Financial Partners at US$74.00 per share, while the most bearish prices it at US$46.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Focus Financial Partners' past performance and to peers in the same industry. We would highlight that Focus Financial Partners' revenue growth is expected to slow, with the forecast 8.1% annualised growth rate until the end of 2022 being well below the historical 21% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.5% annually. Even after the forecast slowdown in growth, it seems obvious that Focus Financial Partners is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Focus Financial Partners' earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. 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 in mind, we wouldn't be too quick to come to a conclusion on Focus Financial Partners. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Focus Financial Partners going out to 2024, and you can see them free on our platform here..

You still need to take note of risks, for example - Focus Financial Partners has 1 warning sign we think 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.