One Forecaster Is Now More Bearish On Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) Than They Used To Be

The latest analyst coverage could presage a bad day for Altisource Portfolio Solutions S.A. (NASDAQ:ASPS), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously. Shares are up 8.7% to US$4.62 in the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the downgrade, the current consensus from Altisource Portfolio Solutions' one analyst is for revenues of US$196m in 2023 which - if met - would reflect a major 25% increase on its sales over the past 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analyst forecasting losses of US$0.51 per share in 2023. Previously, the analyst had been modelling revenues of US$274m and earnings per share (EPS) of US$0.77 in 2023. There looks to have been a major change in sentiment regarding Altisource Portfolio Solutions' prospects, with a sizeable cut to revenues and the analyst now forecasting a loss instead of a profit.

Check out our latest analysis for Altisource Portfolio Solutions

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. For example, we noticed that Altisource Portfolio Solutions' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 19% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 34% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 7.3% per year. Not only are Altisource Portfolio Solutions' revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Altisource Portfolio Solutions dropped from profits to a loss next year. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the serious cut to next year's outlook, it's clear that the analyst has turned more bearish on Altisource Portfolio Solutions, and we wouldn't blame shareholders for feeling a little more cautious themselves.

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 Altisource Portfolio Solutions' business, like concerns around earnings quality. For more information, you can click here to discover this and the 3 other concerns we've identified.

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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.