Legacy Housing Corporation (NASDAQ:LEGH) investors will be delighted, with the company turning in some strong numbers with its latest results. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 13% higher than the analysts had forecast, at US$43m, while EPS were US$0.60 beating analyst models by 58%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Legacy Housing after the latest results.

Check out our latest analysis for Legacy Housing

Taking into account the latest results, the consensus forecast from Legacy Housing's three analysts is for revenues of US$184.6m in 2024. This reflects a credible 2.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 6.2% to US$2.32. Before this earnings report, the analysts had been forecasting revenues of US$176.7m and earnings per share (EPS) of US$1.79 in 2024. So it seems there's been a definite increase in optimism about Legacy Housing's future following the latest results, with a massive increase in the earnings per share forecasts in particular.

Despite these upgrades, the consensus price target fell 14% to US$26.00, perhaps signalling that the uplift in performance is not expected to last. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Legacy Housing at US$29.00 per share, while the most bearish prices it at US$22.00. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Legacy Housing's past performance and to peers in the same industry. We would highlight that Legacy Housing's revenue growth is expected to slow, with the forecast 3.8% annualised growth rate until the end of 2024 being well below the historical 7.9% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that Legacy Housing is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Legacy Housing's earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower 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 Legacy Housing's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Legacy Housing. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Legacy Housing analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Legacy Housing is showing 1 warning sign in our investment analysis , 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.