One thing we could say about the analysts on Tri Pointe Homes, Inc. (NYSE:TPH) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from seven analysts covering Tri Pointe Homes is for revenues of US$3.8b in 2025, implying a chunky 15% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to crater 35% to US$3.24 in the same period. Previously, the analysts had been modelling revenues of US$4.4b and earnings per share (EPS) of US$4.50 in 2025. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Tri Pointe Homes

It'll come as no surprise then, to learn that the analysts have cut their price target 15% to US$40.00.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 15% by the end of 2025. This indicates a significant reduction from annual growth of 6.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.6% annually for the foreseeable future. It's pretty clear that Tri Pointe Homes' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Tri Pointe Homes. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Tri Pointe Homes' revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Tri Pointe Homes.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Tri Pointe Homes, including recent substantial insider selling. Learn more, and discover the 1 other concern we've identified, 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 with high insider ownership.

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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.