Stewart Information Services Earnings Preview

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Investors are bracing for the worst and waiting to see if Stewart Information Services (NYS: STC) will fall short of Wall Street forecasts for the third consecutive quarter. The company will unveil its latest earnings Thursday. The company, through its subsidiaries, provides title insurance and related services required for settlement by the real estate and mortgage industries throughout the United States and in international markets.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Stewart Information Services with analysts unanimously rating it hold. Stewart Information Services' rating hasn't changed over the past three months.
  • Revenue forecasts: On average, analysts predict $411.4 million in revenue this quarter. That would represent a decline of 6.8% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.14 per share. Estimates range from a loss of $0.10 to a profit of $0.40.

What our community says:
CAPS All-Stars are solidly behind the stock, with 91.2% giving it an "outperform" rating. The community at large backs the All-Stars, with 89.5% awarding it a rating of "outperform." Fools have embraced Stewart Information Services and haven't been shy with their opinions lately, logging 101 posts in the past 30 days. Though still bullish, the CAPS rating of four out of five stars for Stewart Information Services is a bit more pessimistic than the community assessment.

Management:
A year-over-year revenue increase last quarter snaps a streak of two consecutive quarters of revenue declines. Revenue rose 4.3% in the first quarter and fell 10.7% in the fourth quarter of the last fiscal year and 6.5% in the third quarter of the last fiscal year.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Net Margin

(2.8%)

(2.2%)

(0.7%)

2.1%

One final thing: If you want to keep tabs on Stewart Information Services movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time this article was published

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