Victory Capital Holdings, Inc. Just Missed EPS By 15%: Here's What Analysts Think Will Happen Next

Victory Capital Holdings, Inc. (NASDAQ:VCTR) shareholders are probably feeling a little disappointed, since its shares fell 6.7% to US$48.69 in the week after its latest first-quarter results. It was not a great result overall. While revenues of US$216m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 15% to hit US$0.84 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Victory Capital Holdings after the latest results.

View our latest analysis for Victory Capital Holdings

Taking into account the latest results, the consensus forecast from Victory Capital Holdings' seven analysts is for revenues of US$897.1m in 2024. This reflects a satisfactory 7.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 15% to US$3.93. Before this earnings report, the analysts had been forecasting revenues of US$901.0m and earnings per share (EPS) of US$4.31 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at US$48.88, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. The most optimistic Victory Capital Holdings analyst has a price target of US$59.00 per share, while the most pessimistic values it at US$32.00. 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.

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. We can infer from the latest estimates that forecasts expect a continuation of Victory Capital Holdings'historical trends, as the 9.9% annualised revenue growth to the end of 2024 is roughly in line with the 9.7% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.5% annually. So although Victory Capital Holdings is expected to maintain its revenue growth rate, it's definitely 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 Victory Capital Holdings. Happily, there were no major changes to revenue forecasts, with the business still 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. We have estimates - from multiple Victory Capital Holdings analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Victory Capital Holdings , and understanding them should be part of your investment process.

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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.