Today is shaping up negative for Home Point Capital Inc. (NASDAQ:HMPT) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Surprisingly the share price has been buoyant, rising 12% to US$1.90 in the past 7 days. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.

Following the latest downgrade, the current consensus, from the eight analysts covering Home Point Capital, is for revenues of US$201m in 2023, which would reflect a disturbing 45% reduction in Home Point Capital's sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 81% to US$0.22. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$251m and losses of US$0.37 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.

See our latest analysis for Home Point Capital

There was no major change to the US$1.86 average analyst price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business. 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 Home Point Capital, with the most bullish analyst valuing it at US$2.50 and the most bearish at US$1.25 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

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. Over the past three years, revenues have declined around 12% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 45% decline in revenue until the end of 2023. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 7.7% annually. So while a broad number of companies are forecast to grow, unfortunately Home Point Capital is expected to see its sales affected worse than other companies in the industry.