Essent Group Ltd. (NYSE:ESNT) just released its quarterly report and things are looking bullish. Essent Group beat earnings, with revenues hitting US$363m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 19%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Taking into account the latest results, Essent Group's six analysts currently expect revenues in 2026 to be US$1.34b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be US$7.48, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$1.38b and earnings per share (EPS) of US$7.14 in 2026. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

The average price target rose 8.7% to US$74.71, with the analysts signalling that the improved earnings outlook is the key driver of value for shareholders - enough to offset the reduction in revenue estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Essent Group at US$80.00 per share, while the most bearish prices it at US$65.00. This is a very narrow spread of estimates, implying either that Essent Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Essent Group's revenue growth is expected to slow, with the forecast 1.9% annualised growth rate until the end of 2026 being well below the historical 6.4% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.1% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Essent Group.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Essent Group following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, earnings are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Essent Group going out to 2028, and you can see them free on our platform here.

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.