Yahoo Finance Downgrade: Here's How Analysts See Ladder Capital Corp (NYSE:LADR) Performing In The Near Term
The latest analyst coverage could presage a bad day for Ladder Capital Corp (NYSE:LADR), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. 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 four analysts covering Ladder Capital provided consensus estimates of US$122m revenue in 2020, which would reflect a sizeable 59% decline on its sales over the past 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of US$0.69 per share in 2020. Previously, the analysts had been modelling revenues of US$197m and earnings per share (EPS) of US$0.52 in 2020. So we can see that the consensus has become notably more bearish on Ladder Capital's outlook with these numbers, making a pretty serious reduction to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.
View our latest analysis for Ladder Capital
The consensus price target fell 11% to US$9.83, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Ladder Capital analyst has a price target of US$11.50 per share, while the most pessimistic values it at US$7.50. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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. We would highlight that sales are expected to reverse, with the forecast 59% revenue decline a notable change from historical growth of 4.0% 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 42% annually for the foreseeable future. It's pretty clear that Ladder Capital's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest low-light for us was that the forecasts for Ladder Capital dropped from profits to a loss this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Ladder Capital's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Ladder Capital.
There might be good reason for analyst bearishness towards Ladder Capital, like dilutive stock issuance over the past year. Learn more, and discover the 3 other flags we've identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
