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It's been a good week for Expensify, Inc. (NASDAQ:EXFY) shareholders, because the company has just released its latest yearly results, and the shares gained 3.0% to US$18.26. Things were not great overall, with a surprise (statutory) loss of US$0.36 per share on revenues of US$143m, even though the analysts had been expecting a profit. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from Expensify's six analysts is for revenues of US$177.2m in 2022, which would reflect a sizeable 24% increase on its sales over the past 12 months. Expensify is also expected to turn profitable, with statutory earnings of US$0.04 per share. Before this earnings report, the analysts had been forecasting revenues of US$181.7m and earnings per share (EPS) of US$0.29 in 2022. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share numbers.
It'll come as no surprise then, to learn that the analysts have cut their price target 38% to US$27.33. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Expensify analyst has a price target of US$47.00 per share, while the most pessimistic values it at US$17.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Expensify's revenue growth is expected to slow, with the forecast 24% annualised growth rate until the end of 2022 being well below the historical 62% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% annually. Even after the forecast slowdown in growth, it seems obvious that Expensify is also expected to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Expensify. They also downgraded their revenue estimates, although industry data suggests that Expensify's revenues are expected to grow faster 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 Expensify's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Expensify. Long-term earnings power is much more important than next year's profits. We have forecasts for Expensify going out to 2024, and you can see them free on our platform here.
Even so, be aware that Expensify is showing 1 warning sign in our investment analysis , 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.