Time To Worry? Analysts Just Downgraded Their Ocwen Financial Corporation (NYSE:OCN) Outlook

Today is shaping up negative for Ocwen Financial Corporation (NYSE:OCN) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After this downgrade, Ocwen Financial's two analysts are now forecasting revenues of US$1.2b in 2022. This would be a notable 9.6% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$1.3b of revenue in 2022. It looks like forecasts have become a fair bit less optimistic on Ocwen Financial, given the measurable cut to revenue estimates.

See our latest analysis for Ocwen Financial

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Ocwen Financial's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 9.6% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 6.6% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to decline 2.7% per year. So it's pretty clear that Ocwen Financial is expected to grow faster than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Ocwen Financial this year. They're also forecasting for revenues to perform better than companies in the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Ocwen Financial going forwards.

But wait - there's more! At least one of Ocwen Financial's two analysts has provided estimates out to 2023, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.