There’s been a notable change in appetite for FlexShopper, Inc. (NASDAQ:FPAY) shares in the week since its annual report, with the stock down 14% to US$2.29. Revenues were in line with expectations, at US$89m, while statutory losses ballooned to US$0.11 per share. Following the result, 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. So we gathered the latest post-earnings forecasts to see what analysts’ statutory forecasts suggest is in store for next year.
Taking into account the latest results, the current consensus from FlexShopper’s three analysts is for revenues of US$128.1m in 2020, which would reflect a major 44% increase on its sales over the past 12 months. FlexShopper is also expected to turn profitable, with statutory earnings of US$0.18 per share. In the lead-up to this report, analysts had been modelling revenues of US$118.7m and earnings per share (EPS) of US$0.08 in 2020. There’s been a pretty noticeable increase in sentiment, with analysts upgrading revenues and making a very substantial lift in earnings per share in particular
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. The most optimistic FlexShopper analyst has a price target of US$3.50 per share, while the most pessimistic values it at US$3.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
It can also be useful to step back and take a broader view of how analyst forecasts compare to FlexShopper’s performance in recent years. Analysts are definitely expecting FlexShopper’s growth to accelerate, with the forecast 44% growth ranking favourably alongside historical growth of 36% per annum over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 3.9% next year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect FlexShopper to grow faster than the wider market.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around FlexShopper’s earnings potential next year. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider market. We previously had no consensus price target, which could suggest the business has reached a point where analysts feel comfortably deriving a valuation for it.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for FlexShopper going out to 2021, and you can see them free on our platform here..
You can also view our analysis of FlexShopper’s balance sheet, and whether we think FlexShopper is carrying too much debt, for free on our platform here.
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