Today is shaping up negative for Real Matters Inc. (TSE:REAL) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. 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.

After this downgrade, Real Matters' six analysts are now forecasting revenues of US$184m in 2024. This would be a notable 12% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 82% to US$0.015. Before this latest update, the analysts had been forecasting revenues of US$215m and earnings per share (EPS) of US$0.035 in 2024. There looks to have been a major change in sentiment regarding Real Matters' prospects, with a measurable cut to revenues and the analysts now forecasting a loss instead of a profit.

View our latest analysis for Real Matters  earnings-and-revenue-growth

The consensus price target fell 6.8% to US$4.86, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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. The most optimistic Real Matters analyst has a price target of US$6.55 per share, while the most pessimistic values it at US$3.82. 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.

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. One thing stands out from these estimates, which is that Real Matters is forecast to grow faster in the future than it has in the past, with revenues expected to display 12% annualised growth until the end of 2024. If achieved, this would be a much better result than the 2.4% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 3.0% per year. Not only are Real Matters' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.



The Bottom Line

The biggest low-light for us was that the forecasts for Real Matters dropped from profits to a loss this year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Real Matters going out to 2026, and you can see them 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.