Analysts Just Slashed Their Ponce Financial Group, Inc. (NASDAQ:PDLB) Earnings Forecasts
One thing we could say about the analysts on Ponce Financial Group, Inc. (NASDAQ:PDLB) - 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) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the downgrade, the latest consensus from Ponce Financial Group's dual analysts is for revenues of US$62m in 2023, which would reflect a huge 26% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 83% to US$0.22. Before this latest update, the analysts had been forecasting revenues of US$71m and earnings per share (EPS) of US$0.18 in 2023. So we can see that the consensus has become notably more bearish on Ponce Financial Group's outlook with these numbers, making a substantial drop in next year's revenue estimates. Furthermore, they expect the business to be loss-making next year, compared to their previous forecasts of a profit.
View our latest analysis for Ponce Financial Group
The consensus price target fell 14% to US$9.50, implicitly signalling that lower earnings per share are a leading indicator for Ponce Financial Group's valuation. 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. There are some variant perceptions on Ponce Financial Group, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$9.00 per share. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Ponce Financial Group'shistorical trends, as the 20% annualised revenue growth to the end of 2023 is roughly in line with the 20% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.3% annually. So although Ponce Financial Group is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that analysts are expecting Ponce Financial Group to become unprofitable next year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Ponce Financial Group.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2024, 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.
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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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