Agora, Inc. (NASDAQ:API) Just Reported Yearly Earnings: Have Analysts Changed Their Mind On The Stock?
Agora, Inc. (NASDAQ:API) shareholders are probably feeling a little disappointed, since its shares fell 4.7% to US$2.62 in the week after its latest annual results. The results look positive overall; while revenues of US$142m were in line with analyst predictions, statutory losses were 4.8% smaller than expected, with Agora losing US$0.88 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Agora
Taking into account the latest results, the most recent consensus for Agora from three analysts is for revenues of US$146.9m in 2024. If met, it would imply a credible 3.8% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 73% to US$0.23. Before this earnings announcement, the analysts had been modelling revenues of US$153.2m and losses of US$0.29 per share in 2024. Although the revenue estimates have fallen somewhat, Agora'sfuture looks a little different to the past, with a cut to the loss per share forecasts in particular.
The consensus price target was broadly unchanged at US$3.70, implying that the business is performing roughly in line with expectations, despite adjustments to both revenue and earnings estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Agora, with the most bullish analyst valuing it at US$4.10 and the most bearish at US$3.20 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Agora is an easy business to forecast or the the analysts are all using similar assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Agora's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Agora's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.8% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. Factoring in the forecast slowdown in growth, it seems obvious that Agora is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, long term profitability is more important for the value creation process. The consensus price target held steady at US$3.70, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Agora analysts - going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Agora you should know about.
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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.
