Yahoo Finance Earnings Update: Here's Why Analysts Just Lifted Their loanDepot, Inc. (NYSE:LDI) Price Target To US$2.60
The analysts might have been a bit too bullish on loanDepot, Inc. (NYSE:LDI), given that the company fell short of expectations when it released its quarterly results last week. It was a pretty negative result overall, with revenues of US$223m missing analyst predictions by 3.8%. Worse, the business reported a statutory loss of US$0.19 per share, much larger than the analysts had forecast prior to the result. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on loanDepot after the latest results.
Check out our latest analysis for loanDepot
Taking into account the latest results, the current consensus from loanDepot's four analysts is for revenues of US$1.10b in 2024. This would reflect a decent 16% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 86% to US$0.078. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.12b and losses of US$0.036 per share in 2024. So it's pretty clear the analysts have mixed opinions on loanDepot after this update; revenues were downgraded and per-share losses expected to increase.
The analysts lifted their price target 5.1% to US$2.60, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic loanDepot analyst has a price target of US$3.50 per share, while the most pessimistic values it at US$1.90. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the loanDepot's past performance and to peers in the same industry. One thing stands out from these estimates, which is that loanDepot is forecast to grow faster in the future than it has in the past, with revenues expected to display 21% annualised growth until the end of 2024. If achieved, this would be a much better result than the 69% annual decline over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.6% annually. So it looks like loanDepot is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at loanDepot. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for loanDepot going out to 2026, and you can see them free on our platform here.
Even so, be aware that loanDepot is showing 1 warning sign in our investment analysis , you should know about...
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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.
