Bearish: Analysts Just Cut Their Guild Holdings Company (NYSE:GHLD) Revenue and EPS estimates

The analysts covering Guild Holdings Company (NYSE:GHLD) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the consensus from three analysts covering Guild Holdings is for revenues of US$1.3b in 2022, implying a concerning 20% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to plummet 43% to US$2.67 in the same period. Previously, the analysts had been modelling revenues of US$1.5b and earnings per share (EPS) of US$3.40 in 2022. Indeed, we can see that the analysts are a lot more bearish about Guild Holdings' prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Guild Holdings

It'll come as no surprise then, to learn that the analysts have cut their price target 6.1% to US$16.90. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Guild Holdings, with the most bullish analyst valuing it at US$21.00 and the most bearish at US$13.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Guild Holdings shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 20% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 33% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 0.6% annually for the foreseeable future. So it's pretty clear that Guild Holdings' revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that Guild Holdings revenue is expected to perform worse than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Guild Holdings.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Guild Holdings analysts - going out to 2023, and you can see them 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.