Party Time: Brokers Just Made Major Increases To Their Crexendo, Inc. (NASDAQ:CXDO) Earnings Forecasts

Crexendo, Inc. (NASDAQ:CXDO) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the most recent consensus for Crexendo from its three analysts is for revenues of US$47m in 2023 which, if met, would be a sizeable 35% increase on its sales over the past 12 months. The loss per share is expected to ameliorate slightly, reducing to US$0.13. Yet before this consensus update, the analysts had been forecasting revenues of US$39m and losses of US$0.17 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

Our analysis indicates that CXDO is potentially undervalued!

It will come as no surprise to learn that the analysts have increased their price target for Crexendo 13% to US$4.33 on the back of these upgrades. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. 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. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against 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 26% 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 11% per year. So it's pretty clear that Crexendo is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for next year, reflecting increased optimism around Crexendo's prospects. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Crexendo.

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 Crexendo analysts - going out to 2024, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks 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.