Taylor Morrison Home Corporation (NYSE:TMHC) investors will be delighted, with the company turning in some strong numbers with its latest results. Results were good overall, with revenues beating analyst predictions by 2.7% to hit US$1.7b. Statutory earnings per share (EPS) came in at US$1.75, some 8.7% above whatthe analysts had expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Taylor Morrison Home after the latest results.
After the latest results, the five analysts covering Taylor Morrison Home are now predicting revenues of US$7.80b in 2024. If met, this would reflect a credible 4.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 9.8% to US$7.98. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$7.43b and earnings per share (EPS) of US$7.45 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Despite these upgrades,the analysts have not made any major changes to their price target of US$64.50, 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 Taylor Morrison Home analyst has a price target of US$69.00 per share, while the most pessimistic values it at US$61.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Taylor Morrison Home's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.2% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Compare this to the 90 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.4% per year. So it's pretty clear that, while Taylor Morrison Home's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Taylor Morrison Home's earnings potential next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at US$64.50, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Taylor Morrison Home analysts - going out to 2025, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Taylor Morrison Home you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.