It's been a good week for QCR Holdings, Inc. (NASDAQ:QCRH) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.8% to US$57.54. Revenues of US$82m fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of US$1.58 an impressive 22% ahead of estimates. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the five analysts covering QCR Holdings are now predicting revenues of US$356.0m in 2024. If met, this would reflect a satisfactory 5.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to decline 13% to US$5.84 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$357.8m and earnings per share (EPS) of US$5.65 in 2024. So the consensus seems to have become somewhat more optimistic on QCR Holdings' earnings potential following these results.
The consensus price target was unchanged at US$70.90, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. There are some variant perceptions on QCR Holdings, with the most bullish analyst valuing it at US$72.50 and the most bearish at US$70.00 per share. This is a very narrow spread of estimates, implying either that QCR Holdings 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 QCR Holdings' past performance and to peers in the same industry. It's pretty clear that there is an expectation that QCR Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.6% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.0% per year. So it's pretty clear that, while QCR Holdings' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around QCR Holdings' earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$70.90, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on QCR Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple QCR Holdings analysts - going out to 2025, and you can see them free on our platform here.
You still need to take note of risks, for example - QCR Holdings has 1 warning sign we think you should be aware of.
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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.