Postal Realty Trust, Inc. Just Missed EPS By 50%: Here's What Analysts Think Will Happen Next

Postal Realty Trust, Inc. (NYSE:PSTL) shareholders are probably feeling a little disappointed, since its shares fell 8.4% to US$15.12 in the week after its latest quarterly results. It looks like a pretty bad result, all things considered. Although revenues of US$11m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 50% to hit US$0.02 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Postal Realty Trust

Following the latest results, Postal Realty Trust's three analysts are now forecasting revenues of US$48.5m in 2022. This would be a decent 13% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 228% to US$0.27. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$50.0m and earnings per share (EPS) of US$0.23 in 2022. Although the analysts have lowered their sales forecasts, they've also made a nice gain to their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

The consensus has made no major changes to the price target of US$20.88, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Postal Realty Trust, with the most bullish analyst valuing it at US$23.00 and the most bearish at US$19.00 per share. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Postal Realty Trust's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 56% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.6% per year. Even after the forecast slowdown in growth, it seems obvious that Postal Realty Trust is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Postal Realty Trust's earnings potential next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Yet - earnings are more important to the intrinsic value of the business. 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 Postal Realty Trust analysts - going out to 2024, and you can see them free on our platform here.

You still need to take note of risks, for example - Postal Realty Trust has 3 warning signs (and 2 which are significant) we think you should know about.

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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.