Vinci Partners Investments Ltd. (NASDAQ:VINP) shareholders are probably feeling a little disappointed, since its shares fell 7.2% to US$10.25 in the week after its latest quarterly results. Results overall were not great, with earnings of R$0.51 per share falling drastically short of analyst expectations. Meanwhile revenues hit R$131m and were slightly better than forecasts. 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 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 Vinci Partners Investments from four analysts is for revenues of R$518.6m in 2024. If met, it would imply a decent 9.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 49% to R$4.78. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$464.0m and earnings per share (EPS) of R$4.44 in 2024. Sentiment certainly seems to have improved after the latest results, with a solid increase in revenue and a small lift in earnings per share estimates.
Despite these upgrades,the analysts have not made any major changes to their price target of US$12.47, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Vinci Partners Investments analyst has a price target of US$13.98 per share, while the most pessimistic values it at US$10.89. This is a very narrow spread of estimates, implying either that Vinci Partners Investments is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. It's clear from the latest estimates that Vinci Partners Investments' rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.9% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.3% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Vinci Partners Investments to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Vinci Partners Investments' 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. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Vinci Partners Investments going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 3 warning signs for Vinci Partners Investments 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.