There's been a notable change in appetite for Meridian Holdings Inc. (NASDAQ:MRDN) shares in the week since its second-quarter report, with the stock down 15% to US$11.27. Revenues of US$50m fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of US$0.17 an impressive 24% ahead of estimates. 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 Meridian Holdings after the latest results.

Taking into account the latest results, the current consensus from Meridian Holdings' dual analysts is for revenues of US$205.0m in 2026. This would reflect a reasonable 4.0% increase on its revenue over the past 12 months. Meridian Holdings is also expected to turn profitable, with statutory earnings of US$0.64 per share. Before this earnings report, the analysts had been forecasting revenues of US$208.7m and earnings per share (EPS) of US$0.67 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target fell 31% to US$19.73, with the analysts clearly linking lower forecast earnings to the performance of the stock price.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Meridian Holdings' revenue growth is expected to slow, with the forecast 8.1% annualised growth rate until the end of 2026 being well below the historical 30% p.a. growth over the last three years. Compare this to the 150 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 8.1% per year. Factoring in the forecast slowdown in growth, it looks like Meridian Holdings is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Meridian Holdings. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Meridian Holdings' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Meridian Holdings. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Meridian Holdings going out as far as 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.