Time To Worry? Analysts Just Downgraded Their Expensify, Inc. (NASDAQ:EXFY) Outlook

The analysts covering Expensify, Inc. (NASDAQ:EXFY) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Shares are up 5.1% to US$2.18 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the latest downgrade, the current consensus, from the seven analysts covering Expensify, is for revenues of US$147m in 2024, which would reflect a small 7.6% reduction in Expensify's sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$164m in 2024. The consensus view seems to have become more pessimistic on Expensify, noting the measurable cut to revenue estimates in this update.

View our latest analysis for Expensify

The consensus price target fell 35% to US$3.64, with the analysts clearly less optimistic about Expensify's valuation following this update.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 6.2% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 20% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 12% annually for the foreseeable future. It's pretty clear that Expensify's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Expensify next year. They also expect company revenue to perform worse than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on Expensify after today.

Of course, this isn't the full story. We have estimates for Expensify from its seven analysts out until 2025, 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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