It's shaping up to be a tough period for Artisan Partners Asset Management Inc. (NYSE:APAM), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$282m, statutory earnings missed forecasts by 13%, coming in at just US$0.90 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Artisan Partners Asset Management

Following the recent earnings report, the consensus from five analysts covering Artisan Partners Asset Management is for revenues of US$1.11b in 2022, implying an uncomfortable 8.8% decline in sales compared to the last 12 months. Statutory earnings per share are forecast to dip 8.7% to US$3.97 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.17b and earnings per share (EPS) of US$4.10 in 2022. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

It'll come as no surprise then, to learn that the analysts have cut their price target 9.2% to US$36.83. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Artisan Partners Asset Management analyst has a price target of US$43.00 per share, while the most pessimistic values it at US$34.00. This is a very narrow spread of estimates, implying either that Artisan Partners Asset Management is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 12% by the end of 2022. This indicates a significant reduction from annual growth of 9.2% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.0% per year. It's pretty clear that Artisan Partners Asset Management's revenues are expected to perform substantially worse 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Artisan Partners Asset Management's future valuation.

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. We have estimates - from multiple Artisan Partners Asset Management analysts - going out to 2024, and you can see them free on our platform here.

Even so, be aware that Artisan Partners Asset Management is showing 2 warning signs in our investment analysis , you should know about...

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