One thing we could say about the analysts on Mr. Cooper Group Inc. (NASDAQ:COOP) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.
Following the latest downgrade, the current consensus, from the four analysts covering Mr. Cooper Group, is for revenues of US$1.9b in 2020, which would reflect a noticeable 5.1% reduction in Mr. Cooper Group's sales over the past 12 months. After this downgrade, the company is anticipated to report a loss of US$1.07 in 2020, a sharp decline from a profit over the last year. Previously, the analysts had been modelling revenues of US$2.2b and earnings per share (EPS) of US$1.65 in 2020. There looks to have been a major change in sentiment regarding Mr. Cooper Group's prospects, with a substantial drop in revenues and the analysts now forecasting a loss instead of a profit.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 5.1% revenue decline a notable change from historical growth of 44% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.2% annually for the foreseeable future. It's pretty clear that Mr. Cooper Group's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts are expecting Mr. Cooper Group to become unprofitable this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Mr. Cooper Group's revenues are expected to grow slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Mr. Cooper Group, and their negativity could be grounds for caution.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Mr. Cooper Group going out to 2021, 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.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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