Yahoo Finance Here's What Analysts Are Forecasting For Enact Holdings, Inc. (NASDAQ:ACT) After Its First-Quarter Results
Investors in Enact Holdings, Inc. (NASDAQ:ACT) had a good week, as its shares rose 2.1% to close at US$30.58 following the release of its first-quarter results. Enact Holdings reported US$292m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.01 beat expectations, being 4.2% higher than what the analysts expected. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Enact Holdings
Taking into account the latest results, the consensus forecast from Enact Holdings' four analysts is for revenues of US$1.19b in 2024. This reflects a modest 2.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to reduce 2.9% to US$4.00 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.19b and earnings per share (EPS) of US$3.83 in 2024. So the consensus seems to have become somewhat more optimistic on Enact Holdings' earnings potential following these results.
The consensus price target was unchanged at US$33.33, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Enact Holdings, with the most bullish analyst valuing it at US$37.00 and the most bearish at US$30.00 per share. This is a very narrow spread of estimates, implying either that Enact Holdings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Enact Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 3.0% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.6% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.7% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Enact Holdings is expected to grow slower than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Enact Holdings following these results. 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.
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 Simply Wall St, we have a full range of analyst estimates for Enact Holdings going out to 2026, and you can see them free on our platform here..
You still need to take note of risks, for example - Enact Holdings has 2 warning signs (and 1 which shouldn't be ignored) we think 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.
