Analyst Forecasts Just Became More Bearish On Ellington Financial Inc. (NYSE:EFC)

The analysts covering Ellington Financial Inc. (NYSE:EFC) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the most recent consensus for Ellington Financial from its five analysts is for revenues of US$153m in 2023 which, if met, would be a major 263% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$240m in 2023. It looks like forecasts have become a fair bit less optimistic on Ellington Financial, given the sizeable cut to revenue estimates.

See our latest analysis for Ellington Financial

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Ellington Financial's rate of growth is expected to accelerate meaningfully, with the forecast 263% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 4.8% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 30% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Ellington Financial to grow faster than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Ellington Financial this year. The analysts also expect revenues to grow faster than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Ellington Financial going forwards.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Ellington Financial's business, like dilutive stock issuance over the past year. Learn more, and discover the 1 other warning sign we've identified, for 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.