PennyMac Mortgage Investment Trust Just Missed EPS By 73%: Here's What Analysts Think Will Happen Next

PennyMac Mortgage Investment Trust (NYSE:PMT) missed earnings with its latest annual results, disappointing overly-optimistic forecasters. Unfortunately, PennyMac Mortgage Investment Trust delivered a serious earnings miss. Revenues of US$420m were 16% below expectations, and statutory earnings per share of US$0.26 missed estimates by 73%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for PennyMac Mortgage Investment Trust

Following the latest results, PennyMac Mortgage Investment Trust's five analysts are now forecasting revenues of US$531.7m in 2022. This would be a major 27% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 509% to US$1.67. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$572.6m and earnings per share (EPS) of US$1.88 in 2022. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a substantial drop in earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the US$19.68 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic PennyMac Mortgage Investment Trust analyst has a price target of US$22.00 per share, while the most pessimistic values it at US$17.50. This is a very narrow spread of estimates, implying either that PennyMac Mortgage Investment Trust is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 27% growth on an annualised basis. That is in line with its 25% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 3.4% per year. So although PennyMac Mortgage Investment Trust 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 PennyMac Mortgage Investment Trust. They also downgraded their revenue estimates, although industry data suggests that PennyMac Mortgage Investment Trust's revenues are 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple PennyMac Mortgage Investment Trust analysts - going out to 2023, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for PennyMac Mortgage Investment Trust that you need to be mindful 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.