EVERTEC, Inc. Just Missed Earnings - But Analysts Have Updated Their Models

There's been a notable change in appetite for EVERTEC, Inc. (NYSE:EVTC) shares in the week since its full-year report, with the stock down 11% to US$36.85. Statutory earnings per share fell badly short of expectations, coming in at US$1.21, some 21% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$695m. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for EVERTEC

After the latest results, the six analysts covering EVERTEC are now predicting revenues of US$849.8m in 2024. If met, this would reflect a huge 22% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 31% to US$1.59. In the lead-up to this report, the analysts had been modelling revenues of US$796.9m and earnings per share (EPS) of US$2.19 in 2024. So it's pretty clear the analysts have mixed opinions on EVERTEC after the latest results; even though they upped their revenue numbers, it came at the cost of a pretty serious reduction to per-share earnings expectations.

The consensus price target was unchanged at US$42.00, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values EVERTEC at US$47.00 per share, while the most bearish prices it at US$33.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await EVERTEC shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting EVERTEC's growth to accelerate, with the forecast 22% annualised growth to the end of 2024 ranking favourably alongside historical growth of 8.4% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect EVERTEC to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business 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.

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. We have estimates - from multiple EVERTEC analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for EVERTEC that we have uncovered.

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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.