Things Look Grim For Open Lending Corporation (NASDAQ:LPRO) After Today's Downgrade

The latest analyst coverage could presage a bad day for Open Lending Corporation (NASDAQ:LPRO), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After this downgrade, Open Lending's ten analysts are now forecasting revenues of US$120m in 2025. This would be a huge 26% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 413% to US$0.20. Prior to this update, the analysts had been forecasting revenues of US$134m and earnings per share (EPS) of US$0.26 in 2025. Indeed, we can see that the analysts are a lot more bearish about Open Lending's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Open Lending

Despite the cuts to forecast earnings, there was no real change to the US$7.25 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Open Lending's past performance and to peers in the same industry. The analysts are definitely expecting Open Lending's growth to accelerate, with the forecast 20% annualised growth to the end of 2025 ranking favourably alongside historical growth of 2.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Open Lending is expected to grow much faster than its 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, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected next year, we wouldn't be surprised if investors were a bit wary of Open Lending.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Open Lending analysts - going out to 2026, 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 with high insider ownership.

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