These Analysts Just Made A Sizeable Downgrade To Their Marqeta, Inc. (NASDAQ:MQ) EPS Forecasts

The latest analyst coverage could presage a bad day for Marqeta, Inc. (NASDAQ:MQ), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After the downgrade, the consensus from Marqeta's 18 analysts is for revenues of US$685m in 2023, which would reflect an uncomfortable 19% decline in sales compared to the last year of performance. Losses are forecast to hold steady at around US$0.39 per share. However, before this estimates update, the consensus had been expecting revenues of US$908m and US$0.32 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Marqeta

The consensus price target was broadly unchanged at US$6.73, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 34% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 32% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.6% per year. It's pretty clear that Marqeta's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Marqeta's revenues are expected to grow slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Marqeta.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Marqeta analysts - going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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