Vertex, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Vertex, Inc. (NASDAQ:VERX) just released its third-quarter report and things are looking bullish. The company beat forecasts, with revenue of US$170m, some 2.9% above estimates, and statutory earnings per share (EPS) coming in at US$0.04, 140% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Vertex

Taking into account the latest results, the consensus forecast from Vertex's twelve analysts is for revenues of US$762.4m in 2025. This reflects a meaningful 19% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 11% to US$0.22. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$749.9m and earnings per share (EPS) of US$0.23 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 31% to US$55.18, suggesting the revised estimates are not indicative of a weaker long-term future for the business. 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. Currently, the most bullish analyst values Vertex at US$61.00 per share, while the most bearish prices it at US$46.00. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Vertex's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Vertex'shistorical trends, as the 15% annualised revenue growth to the end of 2025 is roughly in line with the 14% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 12% per year. So although Vertex is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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. We have forecasts for Vertex going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Vertex 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.