Ryan Specialty Group Holdings, Inc. (NYSE:RYAN) shareholders are probably feeling a little disappointed, since its shares fell 8.8% to US$36.12 in the week after its latest yearly results. Revenues came in at US$1.4b, in line with estimates, while Ryan Specialty Group Holdings reported a statutory loss of US$0.07 per share, well short of prior analyst forecasts for a profit. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ryan Specialty Group Holdings after the latest results.
After the latest results, the seven analysts covering Ryan Specialty Group Holdings are now predicting revenues of US$1.71b in 2022. If met, this would reflect a decent 19% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Ryan Specialty Group Holdings forecast to report a statutory profit of US$0.61 per share. Before this earnings report, the analysts had been forecasting revenues of US$1.69b and earnings per share (EPS) of US$0.65 in 2022. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at US$41.00, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Ryan Specialty Group Holdings at US$45.00 per share, while the most bearish prices it at US$34.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Ryan Specialty Group Holdings' revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 19% growth on an annualised basis. This is compared to a historical growth rate of 41% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.6% annually. Even after the forecast slowdown in growth, it seems obvious that Ryan Specialty Group Holdings is also expected 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$41.00, with the latest estimates not enough to have an impact on their price targets.
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. At Simply Wall St, we have a full range of analyst estimates for Ryan Specialty Group Holdings going out to 2024, and you can see them free on our platform here..
Plus, you should also learn about the 1 warning sign we've spotted with Ryan Specialty Group Holdings .
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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.