It's been a sad week for FirstCash Holdings, Inc. (NASDAQ:FCFS), who've watched their investment drop 11% to US$116 in the week since the company reported its first-quarter result. Results were roughly in line with estimates, with revenues of US$836m and statutory earnings per share of US$1.35. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on FirstCash Holdings after the latest results.
After the latest results, the four analysts covering FirstCash Holdings are now predicting revenues of US$3.43b in 2024. If met, this would reflect a modest 6.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 13% to US$5.79. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.50b and earnings per share (EPS) of US$6.12 in 2024. 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.
Despite the cuts to forecast earnings, there was no real change to the US$135 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. The most optimistic FirstCash Holdings analyst has a price target of US$150 per share, while the most pessimistic values it at US$125. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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. We would highlight that FirstCash Holdings' revenue growth is expected to slow, with the forecast 8.5% annualised growth rate until the end of 2024 being well below the historical 14% 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 11% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than FirstCash Holdings.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for FirstCash Holdings. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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.
With that in mind, we wouldn't be too quick to come to a conclusion on FirstCash Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for FirstCash Holdings going out to 2025, and you can see them free on our platform here.
You still need to take note of risks, for example - FirstCash Holdings has 2 warning signs 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.