Stock Analysis

Crexendo, Inc. (NASDAQ:CXDO) Released Earnings Last Week And Analysts Lifted Their Price Target To US$4.33

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As you might know, Crexendo, Inc. (NASDAQ:CXDO) recently reported its annual numbers. Revenues of US$38m beat expectations by a respectable 2.1%, although statutory losses per share increased. Crexendo lost US$1.54, which was 883% more than what the analysts had included in their models. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Crexendo

NasdaqCM:CXDO Earnings and Revenue Growth March 17th 2023

After the latest results, the three analysts covering Crexendo are now predicting revenues of US$47.6m in 2023. If met, this would reflect a huge 27% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 86% to US$0.20. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$47.3m and losses of US$0.097 per share in 2023. So it's pretty clear the analysts have mixed opinions on Crexendo even after this update; although they reconfirmed their revenue numbers, it came at the cost of a massive increase in per-share losses.

Although the analysts are now forecasting higher losses, the average price target rose 13% to 3.83333, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Crexendo analyst has a price target of US$4.50 per share, while the most pessimistic values it at US$4.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 27% growth on an annualised basis. That is in line with its 28% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.9% per year. So although Crexendo is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Crexendo. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Crexendo. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Crexendo going out to 2024, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 3 warning signs for Crexendo you should be aware of.

What are the risks and opportunities for Crexendo?

Crexendo, Inc. provides cloud communication platform and services, video collaboration, and managed IT services for businesses in the United States, Canada, and internationally.

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  • Trading at 65.3% below our estimate of its fair value

  • Revenue is forecast to grow 15.49% per year


  • Does not have a meaningful market cap ($42M)

  • Shareholders have been diluted in the past year

  • Currently unprofitable and not forecast to become profitable over the next 3 years

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