Results: LPL Financial Holdings Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Investors in LPL Financial Holdings Inc. (NASDAQ:LPLA) had a good week, as its shares rose 8.1% to close at US$360 following the release of its first-quarter results. It looks like a credible result overall - although revenues of US$3.7b were in line with what the analysts predicted, LPL Financial Holdings surprised by delivering a statutory profit of US$4.24 per share, a notable 11% above 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the most recent consensus for LPL Financial Holdings from eleven analysts is for revenues of US$15.0b in 2025. If met, it would imply a notable 16% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 13% to US$15.42. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$14.6b and earnings per share (EPS) of US$14.99 in 2025. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Check out our latest analysis for LPL Financial Holdings

Despite these upgrades,the analysts have not made any major changes to their price target of US$399, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic LPL Financial Holdings analyst has a price target of US$440 per share, while the most pessimistic values it at US$330. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting LPL Financial Holdings is an easy business to forecast or the the analysts are all using similar 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. It's clear from the latest estimates that LPL Financial Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 17% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.4% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect LPL Financial Holdings to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards LPL Financial Holdings following these results. Happily, they also upgraded their revenue estimates, and are forecasting them 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for LPL Financial Holdings going out to 2027, and you can see them free on our platform here..

You still need to take note of risks, for example - LPL Financial Holdings 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.