FirstService Beat Analyst Forecasts, But They're Updating Their Predictions

 It's been a sad week for FirstService Corporation (TSE:FSV), who've watched their investment drop 12% to CA$228 in the week since the company reported its quarterly result. FirstService reported US$1.4b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.24 beat expectations, being 7.4% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on FirstService after the latest results.

Taking into account the latest results, the consensus forecast from FirstService's nine analysts is for revenues of US$5.84b in 2026. This reflects a modest 6.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 27% to US$3.85. In the lead-up to this report, the analysts had been modelling revenues of US$5.99b and earnings per share (EPS) of US$4.01 in 2026. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

It'll come as no surprise then, to learn that the analysts have cut their price target 15% to CA$265.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the FirstService's past performance and to peers in the same industry. We would highlight that FirstService's revenue growth is expected to slow, with the forecast 5.2% annualised growth rate until the end of 2026 being well below the historical 15% 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 6.5% 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 FirstService.

https://finance.yahoo.com/news/firstservice-corporation-just-beat-analyst-112607286.html