Shareholders in Heritage Insurance Holdings, Inc. (NYSE:HRTG) had a terrible week, as shares crashed 21% to US$22.41 in the week since its latest first-quarter results. Statutory earnings per share fell badly short of expectations, coming in at US$1.19, some 21% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$213m. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Heritage Insurance Holdings after the latest results.

Taking into account the latest results, Heritage Insurance Holdings' three analysts currently expect revenues in 2026 to be US$856.1m, approximately in line with the last 12 months. Statutory earnings per share are expected to crater 36% to US$4.49 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$887.8m and earnings per share (EPS) of US$4.40 in 2026. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

The consensus has made no major changes to the price target of US$35.00, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Heritage Insurance Holdings at US$36.00 per share, while the most bearish prices it at US$34.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Heritage Insurance Holdings is an easy business to forecast or the the analysts are all using similar assumptions.

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 Heritage Insurance Holdings' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 1.2% growth on an annualised basis. This is compared to a historical growth rate of 7.6% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that Heritage Insurance Holdings is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Heritage Insurance Holdings' earnings potential next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at US$35.00, with the latest estimates not enough to have an impact on their price targets.

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 Heritage Insurance Holdings going out to 2027, 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.