Need To Know: This Analyst Just Made A Substantial Cut To Their Waterstone Financial, Inc. (NASDAQ:WSBF) Estimates

One thing we could say about the covering analyst on Waterstone Financial, Inc. (NASDAQ:WSBF) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following the latest downgrade, the current consensus, from the sole analyst covering Waterstone Financial, is for revenues of US$176m in 2022, which would reflect a disturbing 25% reduction in Waterstone Financial's sales over the past 12 months. Statutory earnings per share are supposed to tumble 48% to US$1.19 in the same period. Prior to this update, the analyst had been forecasting revenues of US$201m and earnings per share (EPS) of US$1.46 in 2022. Indeed, we can see that the analyst is a lot more bearish about Waterstone Financial's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Waterstone Financial

It'll come as no surprise then, to learn that the analyst has cut their price target 9.5% to US$19.00.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Waterstone Financial's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 31% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 12% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 0.9% per year. The forecasts do look bearish for Waterstone Financial, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately they also cut their revenue estimates for this year, and they expect sales to lag the wider market. That said, earnings per share are more important for creating value for shareholders. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.