Results: Amerisafe, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
Amerisafe, Inc. (NASDAQ:AMSF) just released its annual report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 3.8% to hit US$370m. Amerisafe also reported a statutory profit of US$4.80, which was an impressive 29% above what analysts had forecast. 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 thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Amerisafe
Taking into account the latest results, the current consensus, from the four analysts covering Amerisafe, is for revenues of US$345.1m in 2020, which would reflect a perceptible 6.8% reduction in Amerisafe's sales over the past 12 months. Statutory earnings per share are forecast to dive 40% to US$2.90 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of US$344.8m and earnings per share (EPS) of US$2.93 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target rose 6.6% to US$80.50 despite there being no meaningful change to earnings estimates. It could be that analysts are reflecting the predictability of Amerisafe's earnings by assigning a price premium. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Amerisafe, with the most bullish analyst valuing it at US$81.00 and the most bearish at US$74.00 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
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. One thing that stands out from these estimates is that, even though revenues are forecast to keep falling, the decline is expected to accelerate. Analysts have modelled a 6.8% decline next year, compared to a historical decline of 2.2% per annum for the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the market are forecast to see their revenue decline 0.9% per year. So it looks like Amerisafe is also expected to see its revenues decline at a faster rate than the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.
Still, 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 Amerisafe going out to 2021, and you can see them free on our platform here..
You can also see our analysis of Amerisafe's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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