US$110: That's What Analysts Think Workiva Inc. (NYSE:WK) Is Worth After Its Latest Results
Workiva Inc. (NYSE:WK) shareholders are probably feeling a little disappointed, since its shares fell 8.4% to US$86.16 in the week after its latest full-year results. Revenue hit US$630m in line with forecasts, although the company reported a statutory loss per share of US$2.36 that was somewhat smaller than the analysts expected. 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.
View our latest analysis for Workiva
After the latest results, the ten analysts covering Workiva are now predicting revenues of US$720.8m in 2024. If met, this would reflect a decent 14% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 55% to US$1.06. Before this earnings announcement, the analysts had been modelling revenues of US$730.7m and losses of US$1.18 per share in 2024. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a favorable reduction in losses per share in particular.
Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 5.4% to US$110. It looks likethe analysts have become less optimistic about the overall business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Workiva at US$120 per share, while the most bearish prices it at US$85.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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 Workiva's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2024 being well below the historical 19% p.a. growth over the last five years. Compare this to the 437 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 12% per year. So it's pretty clear that, while Workiva's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Workiva going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Workiva (1 doesn't sit too well with us) you should be aware of.
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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.
