One thing we could say about the analysts on Expensify, Inc. (NASDAQ:EXFY) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Shares are up 5.1% to US$2.18 in the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.
Following the downgrade, the consensus from seven analysts covering Expensify is for revenues of US$147m in 2024, implying a noticeable 7.6% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$164m of revenue in 2024. The consensus view seems to have become more pessimistic on Expensify, noting the substantial drop in revenue estimates in this update.
See our latest analysis for Expensify
Notably, the analysts have cut their price target 35% to US$3.64, suggesting concerns around Expensify'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 6.2% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 20% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 12% annually for the foreseeable future. It's pretty clear that Expensify's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Expensify next year. They're also anticipating slower revenue growth than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Expensify's future valuation. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Expensify after today.
Of course, there's always more to the story. We have estimates for Expensify from its seven analysts out until 2025, 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 that insiders are buying.
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