FlexShopper, Inc. (NASDAQ:FPAY) Analysts Just Slashed Next Year's Estimates

One thing we could say about the analysts on FlexShopper, Inc. (NASDAQ:FPAY) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the current consensus from FlexShopper's three analysts is for revenues of US$142m in 2023 which - if met - would reflect a decent 15% increase on its sales over the past 12 months. Statutory earnings per share are supposed to dip 5.5% to US$0.17 in the same period. Before this latest update, the analysts had been forecasting revenues of US$170m and earnings per share (EPS) of US$0.36 in 2023. Indeed, we can see that the analysts are a lot more bearish about FlexShopper's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for FlexShopper

The consensus price target fell 19% to US$3.67, with the weaker earnings outlook clearly leading analyst valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values FlexShopper at US$6.00 per share, while the most bearish prices it at US$2.50. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that FlexShopper's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2023 being well below the historical 17% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% annually. So it's pretty clear that, while FlexShopper's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for FlexShopper. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

That said, the analysts might have good reason to be negative on FlexShopper, given concerns around earnings quality. Learn more, and discover the 2 other flags we've identified, for 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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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.