James Faucette, an analyst from Morgan Stanley, maintained the Sell rating on Expensify (EXFY – Research Report). The associated price target is $2.00.
James Faucette has given his Sell rating due to a combination of factors including the uncertainty surrounding revenue growth and the challenges in predicting the dynamics of expansion and churn. Despite the company’s positive free cash flow (FCF) outlook for ’24, where they expect $10-12 million compared to a previous breakeven point, there are concerns about the clarity of revenue growth drivers. This lack of transparency, alongside the flat sequential paid member numbers, suggests potential weaknesses that could impact future performance.
Furthermore, Expensify’s recent financial results show a shortfall in revenue and gross profit compared to Morgan Stanley’s expectations and consensus estimates. Although there was an initial improvement in paid member growth, this did not sustain through the latter part of the quarter, indicating potential volatility in customer acquisition and retention. Additionally, while there was significant year-over-year growth in interchange revenue from the Expensify Card, its overall contribution remains relatively small. Combined with the cautious outlook on small and medium business (SMB) closures potentially exceeding pre-Covid levels, these factors contribute to a cautious stance on Expensify’s stock, prompting a Sell recommendation.
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Expensify (EXFY) Company Description:
Expensify Inc is a cloud-based expense management software platform that helps the smallest to the largest businesses simplify the way they manage money. More than 10 million people use Expensify’s free features, which include corporate cards, expense tracking, next-day reimbursement, invoicing, bill pay, and travel booking in one app.
Read More on EXFY:
- Expensify Updates Loan Terms and Engages Investors
- Expensify Simplifies Share Structure, Signals Strategic Shift
- Expensify price target lowered to $6 from $7 at Citi
- SHAREHOLDER ALERT: Potential Recovery for Expensify, Inc. (EXFY) Investors
- Expensify price target raised to $3 from $2 at Piper Sandler
