AvidXchange Holdings, Inc. (NASDAQ:AVDX) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates

AvidXchange Holdings, Inc. (NASDAQ:AVDX) investors will be delighted, with the company turning in some strong numbers with its latest results. Results overall were credible, with revenues arriving 5.1% better than analyst forecasts at US$77m. Higher revenues also resulted in lower statutory losses, which were US$0.13 per share, some 5.1% smaller than the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on AvidXchange Holdings after the latest results.

View our latest analysis for AvidXchange Holdings

After the latest results, the eleven analysts covering AvidXchange Holdings are now predicting revenues of US$337.0m in 2022. If met, this would reflect a notable 19% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 40% to US$0.53. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$305.8m and losses of US$0.55 per share in 2022. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

There was no major change to the consensus price target of US$11.08, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. 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. There are some variant perceptions on AvidXchange Holdings, with the most bullish analyst valuing it at US$13.00 and the most bearish at US$9.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that AvidXchange Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 43% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 32% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect AvidXchange Holdings to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues 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. At Simply Wall St, we have a full range of analyst estimates for AvidXchange Holdings going out to 2024, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for AvidXchange Holdings that you should be aware 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.