Broadmark Realty Capital Inc. (NYSE:BRMK) Analysts Just Cut Their EPS Forecasts Substantially

Today is shaping up negative for Broadmark Realty Capital Inc. (NYSE:BRMK) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. 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 current consensus from Broadmark Realty Capital's four analysts is for revenues of US$113m in 2023 which - if met - would reflect a huge 23% increase on its sales over the past 12 months. Statutory earnings per share are presumed to surge 24% to US$0.55. Before this latest update, the analysts had been forecasting revenues of US$127m and earnings per share (EPS) of US$0.61 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 Broadmark Realty Capital

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. It's pretty clear that there is an expectation that Broadmark Realty Capital's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 18% growth on an annualised basis. This is compared to a historical growth rate of 26% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% annually. Even after the forecast slowdown in growth, it seems obvious that Broadmark Realty Capital is also expected to grow faster than the wider 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 Broadmark Realty Capital. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Broadmark Realty Capital, and their negativity could be grounds for caution.

After a downgrade like this one, it's pretty clear that previous forecasts were too optimistic. Worse, it's possible that the forecast future income could struggle to cover Broadmark Realty Capital'sdividend payments. You can learn more, and discover the 1 possible risk we've identified, for free on our platform here.

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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.