It's been a mediocre week for EVERTEC, Inc. (NYSE:EVTC) shareholders, with the stock dropping 11% to US$36.85 in the week since its latest annual results. It looks like a pretty bad result, all things considered. Although revenues of US$695m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 21% to hit US$1.21 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, EVERTEC's six analysts are now forecasting revenues of US$849.8m in 2024. This would be a substantial 22% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 31% to US$1.59. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$796.9m and earnings per share (EPS) of US$2.19 in 2024. While next year's revenue estimates increased, there was also a large cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.
The consensus price target was unchanged at US$42.00, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values EVERTEC at US$47.00 per share, while the most bearish prices it at US$33.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting EVERTEC's growth to accelerate, with the forecast 22% annualised growth to the end of 2024 ranking favourably alongside historical growth of 8.4% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that EVERTEC is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for EVERTEC. Happily, they also upgraded their revenue estimates, and are forecasting them 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.
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 EVERTEC analysts - going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for EVERTEC that you need to take into consideration.
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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.