The analysts covering Colony Credit Real Estate, Inc. (NYSE:CLNC) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the downgrade, the latest consensus from Colony Credit Real Estate's dual analysts is for revenues of US$323m in 2021, which would reflect a major 40% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 85% to US$0.43. Previously, the analysts had been modelling revenues of US$362m and earnings per share (EPS) of US$0.21 in 2021. There looks to have been a major change in sentiment regarding Colony Credit Real Estate's prospects, with a measurable cut to revenues and the analysts now forecasting a loss instead of a profit.
View our latest analysis for Colony Credit Real Estate
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. One thing stands out from these estimates, which is that Colony Credit Real Estate is forecast to grow faster in the future than it has in the past, with revenues expected to display 56% annualised growth until the end of 2021. If achieved, this would be a much better result than the 1.1% annual decline over the past three years. What's also interesting is that our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue decline 14% annually for the foreseeable future. So it's pretty clear that Colony Credit Real Estate is expected to grow faster than the wider industry.
The Bottom Line
The biggest low-light for us was that the forecasts for Colony Credit Real Estate dropped from profits to a loss this year. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Colony Credit Real Estate, and a few readers might choose to steer clear of the stock.
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 2022, 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.
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. 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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