Things Look Grim For Green Brick Partners, Inc. (NYSE:GRBK) After Today's Downgrade

The latest analyst coverage could presage a bad day for Green Brick Partners, Inc. (NYSE:GRBK), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the latest downgrade, the current consensus, from the five analysts covering Green Brick Partners, is for revenues of US$1.3b in 2023, which would reflect a painful 29% reduction in Green Brick Partners' sales over the past 12 months. Statutory earnings per share are anticipated to plunge 45% to US$3.59 in the same period. Previously, the analysts had been modelling revenues of US$1.4b and earnings per share (EPS) of US$4.17 in 2023. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a considerable drop in earnings per share numbers as well.

View our latest analysis for Green Brick Partners

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 24% by the end of 2023. This indicates a significant reduction from annual growth of 27% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 1.2% per year. The forecasts do look bearish for Green Brick Partners, since they're expecting it to shrink faster than the industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Green Brick Partners. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that Green Brick Partners revenue is expected to perform worse than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Green Brick Partners, and a few readers might choose to steer clear of the stock.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Green Brick Partners going out to 2024, and you can see them 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.

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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.