Offerpad Solutions Inc. (NYSE:OPAD) Just Reported And Analysts Have Been Cutting Their Estimates
Offerpad Solutions Inc. (NYSE:OPAD) just released its latest quarterly results and things are looking bullish. Offerpad Solutions outperformed on both revenues and the expected loss per share, with revenues of US$610m beating estimates by 20%. Statutory losses were US$0.17, 27% smaller thanthe analysts expected. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Offerpad Solutions
After the latest results, the consensus from Offerpad Solutions' eight analysts is for revenues of US$1.79b in 2023, which would reflect a stressful 44% decline in sales compared to the last year of performance. The loss per share is expected to greatly reduce in the near future, narrowing 27% to US$0.46. Before this earnings announcement, the analysts had been modelling revenues of US$2.00b and losses of US$0.46 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also making no real change to the loss per share numbers.
The consensus price target was broadly unchanged at US$0.76, implying that the business is performing roughly in line with expectations, despite a downwards adjustment to forecast sales next year. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Offerpad Solutions at US$1.75 per share, while the most bearish prices it at US$0.35. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 54% by the end of 2023. This indicates a significant reduction from annual growth of 0.9% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 8.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Offerpad Solutions is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$0.76, with the latest estimates not enough to have an impact on their price targets.
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 2025, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 3 warning signs for Offerpad Solutions you should be aware of, and 2 of them are a bit concerning.
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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.
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