It's been a good week for Home BancShares, Inc. (NYSE:HOMB) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.4% to US$29.20. Home BancShares reported US$291m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.65 beat expectations, being 2.6% higher than what the analysts expected. 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 Home BancShares' nine analysts is for revenues of US$1.19b in 2027. This would reflect a credible 6.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 6.4% to US$2.59. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.20b and earnings per share (EPS) of US$2.60 in 2027. 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.
Check out our latest analysis for Home BancShares
There were no changes to revenue or earnings estimates or the price target of US$32.75, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Home BancShares, with the most bullish analyst valuing it at US$35.00 and the most bearish at US$31.00 per share. This is a very narrow spread of estimates, implying either that Home BancShares is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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 Home BancShares' revenue growth is expected to slow, with the forecast 5.0% annualised growth rate until the end of 2027 being well below the historical 8.6% 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 8.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Home BancShares is also expected to grow slower than other industry participants.
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. On the plus side, there were no major changes to revenue estimates; although 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Home BancShares analysts - going out to 2028, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Home BancShares you should be aware of.
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