Earnings Update: Instructure Holdings, Inc. (NYSE:INST) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts

Last week saw the newest first-quarter earnings release from Instructure Holdings, Inc. (NYSE:INST), an important milestone in the company's journey to build a stronger business. It was a pretty bad result overall; while revenues were in line with expectations at US$155m, statutory losses exploded to US$0.15 per share. 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 Instructure Holdings after the latest results.

View our latest analysis for Instructure Holdings

After the latest results, the twelve analysts covering Instructure Holdings are now predicting revenues of US$663.1m in 2024. If met, this would reflect a meaningful 19% improvement in revenue compared to the last 12 months. Per-share losses are expected to explode, reaching US$0.46 per share. Before this earnings announcement, the analysts had been modelling revenues of US$661.3m and losses of US$0.28 per share in 2024. So it's pretty clear the analysts have mixed opinions on Instructure Holdings even after this update; although they reconfirmed their revenue numbers, it came at the cost of a considerable increase to per-share losses.

The consensus price target held steady at US$30.09, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. 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 Instructure Holdings analyst has a price target of US$35.00 per share, while the most pessimistic values it at US$25.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Instructure Holdings' past performance and to peers in the same industry. The analysts are definitely expecting Instructure Holdings' growth to accelerate, with the forecast 26% annualised growth to the end of 2024 ranking favourably alongside historical growth of 19% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Instructure Holdings is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Instructure Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for Instructure Holdings going out to 2026, 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 1 warning sign for Instructure Holdings that you need to be mindful of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.