Kearny Financial Corp. (NASDAQ:KRNY) missed earnings with its latest first-quarter results, disappointing overly-optimistic forecasters. Kearny Financial missed analyst forecasts, with revenues of US$45m and statutory earnings per share (EPS) of US$0.16, falling short by 3.6% and 5.9% respectively. 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 Kearny Financial after the latest results.
Taking into account the latest results, the consensus forecast from Kearny Financial's dual analysts is for revenues of US$196.3m in 2027. This reflects a meaningful 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 31% to US$0.77. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$197.6m and earnings per share (EPS) of US$0.78 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
See our latest analysis for Kearny Financial
Despite cutting their earnings forecasts,the analysts have lifted their price target 12% to US$10.67, suggesting that these impacts are not expected to weigh on the stock's value in the long term.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Kearny Financial is forecast to grow faster in the future than it has in the past, with revenues expected to display 15% annualised growth until the end of 2027. If achieved, this would be a much better result than the 7.5% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.0% annually. Not only are Kearny Financial's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Kearny Financial. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 2028, which can be seen for free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Kearny Financial , and understanding it should be part of your investment process.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.