It's been a pretty great week for BGC Partners, Inc. (NASDAQ:BGCP) shareholders, with its shares surging 10% to US$2.92 in the week since its latest quarterly results. Revenues were US$455m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.05, an impressive 150% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, BGC Partners' dual analysts are now forecasting revenues of US$2.18b in 2021. This would be a decent 9.2% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 81% to US$0.23. In the lead-up to this report, the analysts had been modelling revenues of US$2.12b and earnings per share (EPS) of US$0.20 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a decent improvement in earnings per share in particular.
As a result, it might be a surprise to see thatthe analysts have cut their price target 13% to US$7.00, which could suggest the forecast improvement in performance is not expected to last.
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 BGC Partners is forecast to grow faster in the future than it has in the past, with revenues expected to grow 9.2%. If achieved, this would be a much better result than the 8.1% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 5.9% per year. So it looks like BGC Partners is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around BGC Partners' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.
Before you take the next step you should know about the 3 warning signs for BGC Partners (1 is concerning!) that we have uncovered.
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. 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.
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