The analysts covering Nerdy, Inc. (NYSE:NRDY) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. 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 eight analysts covering Nerdy is for revenues of US$193m in 2025, implying a discernible 2.2% decline in sales compared to the last 12 months. Losses are supposed to balloon 30% to US$0.43 per share. However, before this estimates update, the consensus had been expecting revenues of US$239m and US$0.37 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

The consensus price target fell 38% to US$1.92, implicitly signalling that lower earnings per share are a leading indicator for Nerdy's valuation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 1.8% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 16% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 10% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Nerdy is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for next year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Nerdy's 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 Nerdy.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Nerdy analysts - 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 with high insider ownership.

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