Provident Financial Holdings, Inc. (NASDAQ:PROV) just released its latest quarterly report and things are not looking great. Provident Financial Holdings missed earnings this time around, with US$9.4m revenue coming in 3.3% below what the analysts had modelled. Statutory earnings per share (EPS) of US$0.22 also fell short of expectations by 15%. 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 Provident Financial Holdings after the latest results.
Taking into account the latest results, Provident Financial Holdings' twin analysts currently expect revenues in 2025 to be US$40.2m, approximately in line with the last 12 months. Statutory earnings per share are predicted to soar 27% to US$1.32. In the lead-up to this report, the analysts had been modelling revenues of US$42.3m and earnings per share (EPS) of US$1.42 in 2025. 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.
It'll come as no surprise then, to learn that the analysts have cut their price target 6.7% to US$14.00.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2025. That would be a definite improvement, given that the past five years have seen revenue shrink 4.2% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.0% annually. So it's pretty clear that, although revenues are improving, Provident Financial Holdings is still expected to grow slower than the industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
Even so, be aware that Provident Financial Holdings 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.