Last week, you might have seen that South Plains Financial, Inc. (NASDAQ:SPFI) released its quarterly result to the market. The early response was not positive, with shares down 2.2% to US$25.60 in the past week. Revenues were US$48m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.78 were also better than expected, beating analyst predictions by 20%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for South Plains Financial

After the latest results, the consensus from South Plains Financial's three analysts is for revenues of US$193.2m in 2024, which would reflect an uneasy 12% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to plunge 40% to US$2.37 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$197.4m and earnings per share (EPS) of US$2.34 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The average price target was steady at US$29.63even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic South Plains Financial analyst has a price target of US$31.00 per share, while the most pessimistic values it at US$28.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 9.7% annualised decline to the end of 2024. That is a notable change from historical growth of 10% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.3% per year. It's pretty clear that South Plains Financial's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$29.63, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on South Plains Financial. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple South Plains Financial analysts - going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - South Plains Financial has 3 warning signs (and 1 which is concerning) 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.