The analysts covering First Foundation Inc. (NYSE:FFWM) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following this downgrade, First Foundation's five analysts are forecasting 2024 revenues to be US$230m, approximately in line with the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$0.35 in per-share earnings. Previously, the analysts had been modelling revenues of US$257m and earnings per share (EPS) of US$0.34 in 2024. It looks like there's been a meaningful change to the consensus view following the recent earnings report, with the analysts making a substantial drop in to revenue forecasts and a small increase to to this year's earnings estimates.

Check out our latest analysis for First Foundation

There was no real change to the average price target of US$9.40, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 1.6% by the end of 2024. This indicates a significant reduction from annual growth of 8.9% 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 6.0% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - First Foundation is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of First Foundation going forwards.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple First Foundation analysts - going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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