Shareholders might have noticed that Green Brick Partners, Inc. (NYSE:GRBK) filed its full-year result this time last week. The early response was not positive, with shares down 4.5% to US$54.61 in the past week. Revenues of US$1.8b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$6.14, missing estimates by 3.2%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Green Brick Partners' four analysts is for revenues of US$1.95b in 2024. This would reflect a decent 9.6% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 9.3% to US$6.92. Before this earnings report, the analysts had been forecasting revenues of US$1.97b and earnings per share (EPS) of US$7.05 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$52.00, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Green Brick Partners at US$55.00 per share, while the most bearish prices it at US$49.00. This is a very narrow spread of estimates, implying either that Green Brick Partners is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Green Brick Partners' past performance and to peers in the same industry. We would highlight that Green Brick Partners' revenue growth is expected to slow, with the forecast 9.6% annualised growth rate until the end of 2024 being well below the historical 23% 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 5.1% annually. Even after the forecast slowdown in growth, it seems obvious that Green Brick Partners is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$52.00, with the latest estimates not enough to have an impact on their price targets.
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 forecasts for Green Brick Partners going out to 2025, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Green Brick Partners that we have uncovered.
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