What You Need To Know About The Offerpad Solutions Inc. (NYSE:OPAD) Analyst Downgrade Today

One thing we could say about the analysts on Offerpad Solutions Inc. (NYSE:OPAD) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

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Following the latest downgrade, the current consensus, from the four analysts covering Offerpad Solutions, is for revenues of US$672m in 2025, which would reflect a small 4.5% reduction in Offerpad Solutions' sales over the past 12 months. Losses are expected to be contained, narrowing 13% per share from last year to US$1.62 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$796m and losses of US$1.60 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also making no real change to the loss per share numbers.

Check out our latest analysis for Offerpad Solutions

The consensus price target rose 11% to US$1.18, seeming to imply that weaker revenue sentiment is not expected to have a major impact on the company's valuation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would also point out that the forecast 8.8% annualised revenue decline to the end of 2025 is better than the historical trend, which saw revenues shrink 64% annually over the past three years By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 10% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Offerpad Solutions to suffer worse than the wider industry.

The Bottom Line

Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Offerpad Solutions after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Offerpad Solutions going out to 2027, 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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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.