Open Lending Corporation Just Beat EPS By 17%: Here's What Analysts Think Will Happen Next

Open Lending Corporation (NASDAQ:LPRO) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 7.1% to hit US$25m. Open Lending reported statutory earnings per share (EPS) US$0.01, which was a notable 17% above what the analysts had 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the current consensus from Open Lending's eight analysts is for revenues of US$95.8m in 2025. This would reflect a major 489% increase on its revenue over the past 12 months. Earnings are expected to improve, with Open Lending forecast to report a statutory profit of US$0.035 per share. Before this earnings report, the analysts had been forecasting revenues of US$96.8m and earnings per share (EPS) of US$0.049 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

View our latest analysis for Open Lending

It might be a surprise to learn that the consensus price target was broadly unchanged at US$2.97, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Open Lending, with the most bullish analyst valuing it at US$4.00 and the most bearish at US$2.50 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. For example, we noticed that Open Lending's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 30x growth to the end of 2025 on an annualised basis. That is well above its historical decline of 16% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 3.5% per year. So it looks like Open Lending is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Open Lending. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue 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 in mind, we wouldn't be too quick to come to a conclusion on Open Lending. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Open Lending analysts - going out to 2027, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.