Heritage Global Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

As you might know, Heritage Global Inc. (NASDAQ:HGBL) last week released its latest third-quarter, and things did not turn out so great for shareholders. Heritage Global delivered a grave earnings miss, with both revenues (US$10m) and statutory earnings per share (US$0.03) falling badly short of analyst expectations. 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 Heritage Global

Taking into account the latest results, the consensus forecast from Heritage Global's two analysts is for revenues of US$60.3m in 2025. This reflects a major 21% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to dip 5.3% to US$0.26 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$61.7m and earnings per share (EPS) of US$0.29 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

The analysts made no major changes to their price target of US$4.33, suggesting the downgrades are not expected to have a long-term impact on Heritage Global's valuation.

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. It's pretty clear that there is an expectation that Heritage Global's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 16% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.7% annually. Even after the forecast slowdown in growth, it seems obvious that Heritage Global is also expected to grow faster than 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 Heritage Global. They also downgraded Heritage Global's revenue estimates, but industry data suggests that it is 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Heritage Global 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.