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PennyMac Financial Services, Inc. (NYSE:PFSI) Analysts Just Slashed This Year's Revenue Estimates By 16%

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The analysts covering PennyMac Financial Services, Inc. (NYSE:PFSI) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the current consensus, from the four analysts covering PennyMac Financial Services, is for revenues of US$2.3b in 2022, which would reflect a substantial 42% reduction in PennyMac Financial Services' sales over the past 12 months. Before the latest update, the analysts were foreseeing US$2.7b of revenue in 2022. It looks like forecasts have become a fair bit less optimistic on PennyMac Financial Services, given the measurable cut to revenue estimates.

See our latest analysis for PennyMac Financial Services

earnings-and-revenue-growth
earnings-and-revenue-growth

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 42% by the end of 2022. This indicates a significant reduction from annual growth of 34% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 1.4% per year. The forecasts do look bearish for PennyMac Financial Services, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. Analysts also expect revenues to shrink faster than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on PennyMac Financial Services after today.

Of course, there's always more to the story. At least one of PennyMac Financial Services' four analysts has provided estimates out to 2023, which can be seen for 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.