Asure Software, Inc. (NASDAQ:ASUR) Just Reported Earnings, And Analysts Cut Their Target Price

It's been a mediocre week for Asure Software, Inc. (NASDAQ:ASUR) shareholders, with the stock dropping 12% to US$8.97 in the week since its latest yearly results. Asure Software reported revenues of US$119m, in line with expectations, but it unfortunately also reported (statutory) losses of US$0.42 per share, which were slightly larger than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Asure Software

Taking into account the latest results, the consensus forecast from Asure Software's eight analysts is for revenues of US$123.7m in 2024. This reflects an okay 3.9% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 72% to US$0.10. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$121.7m and losses of US$0.11 per share in 2024. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.

Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 23% to US$14.63. It looks likethe analysts have become less optimistic about the overall business. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Asure Software analyst has a price target of US$20.00 per share, while the most pessimistic values it at US$8.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. It's pretty clear that there is an expectation that Asure Software's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.9% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.4% annually. Factoring in the forecast slowdown in growth, it seems obvious that Asure Software is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Asure Software's revenue is expected to perform worse 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 Asure Software's future valuation.

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 Asure Software going out to 2025, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Asure Software that you need to take into consideration.

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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.