Earnings Update: Here's Why Analysts Just Lifted Their Repay Holdings Corporation (NASDAQ:RPAY) Price Target To US$11.38
Shareholders of Repay Holdings Corporation (NASDAQ:RPAY) will be pleased this week, given that the stock price is up 19% to US$9.89 following its latest annual results. Revenues were in line with expectations, at US$297m, while statutory losses ballooned to US$1.23 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Repay Holdings after the latest results.
See our latest analysis for Repay Holdings
Taking into account the latest results, the most recent consensus for Repay Holdings from eleven analysts is for revenues of US$318.1m in 2024. If met, it would imply a modest 7.2% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 94% to US$0.067. Before this latest report, the consensus had been expecting revenues of US$319.8m and US$0.14 per share in losses. Although the revenue estimates have not really changed Repay Holdings'future looks a little different to the past, with a very favorable reduction to the loss per share forecasts in particular.
These new estimates led to the consensus price target rising 9.6% to US$11.38, with lower forecast losses suggesting things could be looking up for Repay Holdings. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Repay Holdings at US$16.00 per share, while the most bearish prices it at US$8.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Repay Holdings' past performance and to peers in the same industry. We would highlight that Repay Holdings' revenue growth is expected to slow, with the forecast 7.2% annualised growth rate until the end of 2024 being well below the historical 23% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.0% per year. Even after the forecast slowdown in growth, it seems obvious that Repay Holdings is also expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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 Repay Holdings analysts - going out to 2026, and you can see them free on our platform here.
It might also be worth considering whether Repay Holdings' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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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.
