It's been a good week for Essent Group Ltd. (NYSE:ESNT) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.9% to US$60.27. Revenues were US$319m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$1.93 were also better than expected, beating analyst predictions by 13%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following last week's earnings report, Essent Group's seven analysts are forecasting 2025 revenues to be US$1.28b, approximately in line with the last 12 months. Statutory per share are forecast to be US$7.14, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$1.29b and earnings per share (EPS) of US$6.84 in 2025. So the consensus seems to have become somewhat more optimistic on Essent Group's earnings potential following these results.
View our latest analysis for Essent Group
The consensus price target was unchanged at US$66.25, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. Currently, the most bullish analyst values Essent Group at US$70.00 per share, while the most bearish prices it at US$59.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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. We would highlight that Essent Group's revenue growth is expected to slow, with the forecast 1.1% annualised growth rate until the end of 2025 being well below the historical 6.2% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.0% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Essent Group.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Essent Group following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Essent Group's revenue is expected to perform worse 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 Essent Group analysts - going out to 2027, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with Essent Group (including 1 which is a bit unpleasant) .
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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.