The NerdWallet, Inc. (NASDAQ:NRDS) First-Quarter Results Are Out And Analysts Have Published New Forecasts

Investors in NerdWallet, Inc. (NASDAQ:NRDS) had a good week, as its shares rose 9.6% to close at US$10.25 following the release of its quarterly results. Sales of US$129m came in 4.4% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.16, a 10% miss. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on NerdWallet after the latest results.

Check out our latest analysis for NerdWallet

Following the latest results, NerdWallet's seven analysts are now forecasting revenues of US$482.7m in 2022. This would be a decent 15% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 33% to US$0.40. Before this latest report, the consensus had been expecting revenues of US$482.7m and US$0.40 per share in losses.

As a result there was no major change to the consensus price target of US$22.21, implying that the business is trading roughly in line with expectations despite ongoing losses. 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. The most optimistic NerdWallet analyst has a price target of US$33.00 per share, while the most pessimistic values it at US$13.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that NerdWallet's revenue growth is expected to slow, with the forecast 21% annualised growth rate until the end of 2022 being well below the historical 71% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 14% per year. So it's pretty clear that, while NerdWallet's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 estimates - from multiple NerdWallet analysts - going out to 2024, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for NerdWallet that you need to be mindful 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.