Shareholders of Heritage Insurance Holdings, Inc. (NYSE:HRTG) will be pleased this week, given that the stock price is up 19% to US$12.20 following its latest quarterly results. It looks like a credible result overall - although revenues of US$212m were what the analysts expected, Heritage Insurance Holdings surprised by delivering a (statutory) profit of US$0.27 per share, an impressive 1,250% above what was forecast. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for Heritage Insurance Holdings from two analysts is for revenues of US$875.5m in 2025. If met, it would imply a decent 10% increase on its revenue over the past 12 months. Statutory earnings per share are expected to sink 19% to US$2.00 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$886.4m and earnings per share (EPS) of US$2.28 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.
Despite cutting their earnings forecasts,the analysts have lifted their price target 28% to US$16.00, 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. We can infer from the latest estimates that forecasts expect a continuation of Heritage Insurance Holdings'historical trends, as the 8.2% annualised revenue growth to the end of 2025 is roughly in line with the 8.4% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.3% annually. So it's pretty clear that Heritage Insurance Holdings is forecast to grow substantially faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Heritage Insurance Holdings. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Heritage Insurance Holdings. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2026, 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 2 warning signs with Heritage Insurance Holdings (at least 1 which can't be ignored) , and understanding these should be part of your investment process.
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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.
