Growth Investors: Industry Analysts Just Upgraded Their AvidXchange Holdings, Inc. (NASDAQ:AVDX) Revenue Forecasts By 10%

Shareholders in AvidXchange Holdings, Inc. (NASDAQ:AVDX) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. AvidXchange Holdings has also found favour with investors, with the stock up a notable 11% to US$7.98 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the current consensus from AvidXchange Holdings' eleven analysts is for revenues of US$337m in 2022 which - if met - would reflect a meaningful 19% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 40% to US$0.53. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$306m 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.

See our latest analysis for AvidXchange Holdings

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. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. 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. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around AvidXchange Holdings' prospects. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at AvidXchange Holdings.

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 AvidXchange Holdings going out to 2024, 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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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.