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These Analysts Think MBIA Inc.'s (NYSE:MBI) Sales Are Under Threat

Simply Wall St
·2-min read

One thing we could say about the analysts on MBIA Inc. (NYSE:MBI) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the current consensus from MBIA's dual analysts is for revenues of US$110m in 2021 which - if met - would reflect a substantial 45% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$132m in 2021. It looks like forecasts have become a fair bit less optimistic on MBIA, given the measurable cut to revenue estimates.

View our latest analysis for MBIA

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earnings-and-revenue-growth

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. For example, we noticed that MBIA's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 109% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 10% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.5% annually. Not only are MBIA's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for MBIA this year. Analysts also expect revenues to grow faster than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on MBIA after today.

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Of course, there's always more to the story. At least one of MBIA's dual analysts has provided estimates 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.