Bearish: Analysts Just Cut Their Doma Holdings Inc. (NYSE:DOMA) Revenue and EPS estimates

The latest analyst coverage could presage a bad day for Doma Holdings Inc. (NYSE:DOMA), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon. Investors however, have been notably more optimistic about Doma Holdings recently, with the stock price up a notable 18% to US$1.70 in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

After the downgrade, the consensus from Doma Holdings' three analysts is for revenues of US$474m in 2022, which would reflect an uneasy 13% decline in sales compared to the last year of performance. Losses are expected to increase substantially, hitting US$0.53 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$592m and losses of US$0.29 per share in 2022. 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 expecting losses per share to increase.

See our latest analysis for Doma Holdings

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Doma Holdings' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 16% by the end of 2022. This indicates a significant reduction from annual growth of 16% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Doma Holdings is expected to lag the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Doma Holdings. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Doma Holdings, and a few readers might choose to steer clear of the stock.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Doma Holdings analysts - going out to 2024, 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 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.