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There's been a notable change in appetite for Offerpad Solutions Inc. (NYSE:OPAD) shares in the week since its quarterly report, with the stock down 15% to US$0.95. Despite revenues of US$161m falling 3.6% short of expectations, statutory losses of US$0.55 per share were well contained, and in line with analyst models. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
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Taking into account the latest results, Offerpad Solutions' five analysts currently expect revenues in 2025 to be US$803.8m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 29% to US$1.54. Before this earnings announcement, the analysts had been modelling revenues of US$920.2m and losses of US$1.77 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.
See our latest analysis for Offerpad Solutions
The analysts have cut their price target 55% to US$1.00per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Offerpad Solutions, with the most bullish analyst valuing it at US$2.25 and the most bearish at US$1.00 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
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. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2025. That would be a definite improvement, given that the past three years have seen revenue shrink 56% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 10% annually. Although Offerpad Solutions' revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.