Here's What Analysts Are Forecasting For Doma Holdings Inc. (NYSE:DOMA) After Its Full-Year Results

One of the biggest stories of last week was how Doma Holdings Inc. (NYSE:DOMA) shares plunged 30% in the week since its latest full-year results, closing yesterday at US$2.36. It was a respectable set of results; while revenues of US$558m were in line with analyst predictions, statutory losses were 13% smaller than expected, with Doma Holdings losing US$0.64 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Doma Holdings

Taking into account the latest results, the consensus forecast from Doma Holdings' three analysts is for revenues of US$605.1m in 2022, which would reflect a decent 8.4% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 51% to US$0.17. Before this latest report, the consensus had been expecting revenues of US$621.9m and US$1.42 per share in losses. Although the revenue estimates have fallen somewhat, Doma Holdings'future looks a little different to the past, with a considerable decrease in the loss per share forecasts in particular.

The consensus price target was broadly unchanged at US$13.00, implying that the business is performing roughly in line with expectations, despite adjustments to both revenue and earnings estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Doma Holdings analyst has a price target of US$14.00 per share, while the most pessimistic values it at US$11.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Doma Holdings' revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 8.4% growth on an annualised basis. This is compared to a historical growth rate of 42% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.8% annually. So it's pretty clear that, while Doma Holdings' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at US$13.00, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Doma Holdings going out to 2024, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Doma Holdings that you need to be mindful of.

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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.