Blend Labs, Inc. (NYSE:BLND) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Shareholders in Blend Labs, Inc. (NYSE:BLND) had a terrible week, as shares crashed 33% to US$0.95 in the week since its latest yearly results. Blend Labs reported revenues of US$235m, in line with expectations, but it unfortunately also reported (statutory) losses of US$3.28 per share, which were slightly larger than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Blend Labs

Following the recent earnings report, the consensus from nine analysts covering Blend Labs is for revenues of US$164.6m in 2023, implying a substantial 30% decline in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 72% to US$0.90. Before this earnings announcement, the analysts had been modelling revenues of US$212.5m and losses of US$0.80 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

The consensus price target fell 17% to US$1.97, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Blend Labs at US$2.50 per share, while the most bearish prices it at US$1.40. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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 30% by the end of 2023. This indicates a significant reduction from annual growth of 47% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 12% per year. It's pretty clear that Blend Labs' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Blend Labs. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Blend Labs' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Blend Labs going out to 2025, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 4 warning signs for Blend Labs (of which 1 is concerning!) you should know about.

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

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here