Hercules Capital, Inc. (NYSE:HTGC) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like a credible result overall - although revenues of US$122m were in line with what the analysts predicted, Hercules Capital surprised by delivering a statutory profit of US$0.57 per share, a notable 11% above expectations. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Taking into account the latest results, the most recent consensus for Hercules Capital from eight analysts is for revenues of US$509.4m in 2024. If met, it would imply a modest 6.8% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 2.0% to US$2.10. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$503.5m and earnings per share (EPS) of US$2.05 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 5.5% to US$19.69. 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 Hercules Capital analyst has a price target of US$23.00 per share, while the most pessimistic values it at US$16.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 Hercules Capital's revenue growth is expected to slow, with the forecast 9.1% annualised growth rate until the end of 2024 being well below the historical 13% 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 5.7% annually. Even after the forecast slowdown in growth, it seems obvious that Hercules Capital is also expected to grow faster than the wider industry.

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 Hercules Capital following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Hercules Capital. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Hercules Capital analysts - going out to 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Hercules Capital (1 doesn't sit too well with us) you should be aware of.

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