Morningstar, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Last week saw the newest yearly earnings release from Morningstar, Inc. (NASDAQ:MORN), an important milestone in the company's journey to build a stronger business. Revenues were US$2.0b, approximately in line with whatthe analyst expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$3.29, an impressive 22% ahead of estimates. Following the result, the analyst has 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 estimate suggests is in store for next year.

Check out our latest analysis for Morningstar

Following the latest results, Morningstar's solitary analyst are now forecasting revenues of US$2.30b in 2024. This would be a solid 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 63% to US$5.39. Yet prior to the latest earnings, the analyst had been anticipated revenues of US$2.23b and earnings per share (EPS) of US$4.72 in 2024. So it seems there's been a definite increase in optimism about Morningstar's future following the latest results, with a nice increase in the earnings per share forecasts in particular.

Althoughthe analyst has upgraded their earnings estimates, there was no change to the consensus price target of US$330, suggesting that the forecast performance does not have a long term impact on the company's valuation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analyst, with revenue forecast to display 13% growth on an annualised basis. That is in line with its 14% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.5% annually. So although Morningstar is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analyst upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Morningstar following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$330, with the latest estimates not enough to have an impact on their price target.

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 2026, which can be seen for free on our platform here.

Even so, be aware that Morningstar is showing 1 warning sign in our investment analysis , you should know about...

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.