Nayax Ltd. (TLV:NYAX) Analysts Are Pretty Bullish On The Stock After Recent Results

Nayax Ltd. (TLV:NYAX) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues were in line with expectations, at US$78m, while statutory losses ballooned to US$0.083 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Nayax

Taking into account the latest results, the current consensus from Nayax's five analysts is for revenues of US$327.0m in 2024. This would reflect a huge 22% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 37% to US$0.25. Before this earnings announcement, the analysts had been modelling revenues of US$325.2m and losses of US$0.15 per share in 2024. While this year's revenue estimates held steady, there was also a sizeable expansion in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

Although the analysts are now forecasting higher losses, the average price target rose 7.3% to 79.4525761863329, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. 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. There are some variant perceptions on Nayax, with the most bullish analyst valuing it at ₪87.52 and the most bearish at ₪83.04 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Nayax's past performance and to peers in the same industry. It's clear from the latest estimates that Nayax's rate of growth is expected to accelerate meaningfully, with the forecast 48% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 32% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Nayax is expected to grow much faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Nayax. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Nayax. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Nayax analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Nayax has 2 warning signs we think 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.