Offerpad Solutions Inc. (NYSE:OPAD) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Offerpad Solutions Inc. (NYSE:OPAD) shareholders are probably feeling a little disappointed, since its shares fell 9.5% to US$6.86 in the week after its latest quarterly results. Revenues of US$285m beat expectations by a respectable 5.6%, although statutory losses per share increased. Offerpad Solutions lost US$0.64, which was 39% more than what the analysts had included in their models. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Offerpad Solutions

Taking into account the latest results, the current consensus from Offerpad Solutions' five analysts is for revenues of US$1.17b in 2024. This would reflect a decent 18% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 38% to US$1.71. Before this earnings announcement, the analysts had been modelling revenues of US$1.33b and losses of US$1.34 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

The average price target fell 15% to US$7.30, implicitly signalling that lower earnings per share are a leading indicator for Offerpad Solutions' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Offerpad Solutions analyst has a price target of US$9.00 per share, while the most pessimistic values it at US$6.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. The analysts are definitely expecting Offerpad Solutions' growth to accelerate, with the forecast 25% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.3% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Offerpad Solutions is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded Offerpad Solutions' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Offerpad Solutions. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Offerpad Solutions going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 3 warning signs for Offerpad Solutions you should know about.

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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.