Analysts Have Been Trimming Their Qualtrics International Inc. (NASDAQ:XM) Price Target After Its Latest Report

It's been a good week for Qualtrics International Inc. (NASDAQ:XM) shareholders, because the company has just released its latest second-quarter results, and the shares gained 2.2% to US$13.00. Sales of US$356m came in 3.3% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.48, a 16% miss. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Qualtrics International

Taking into account the latest results, the most recent consensus for Qualtrics International from 18 analysts is for revenues of US$1.43b in 2022 which, if met, would be a major 22% increase on its sales over the past 12 months. Losses are expected to be contained, narrowing 15% from last year to US$1.67. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.43b and losses of US$1.67 per share in 2022.

The analysts trimmed their valuations, with the average price target falling 43% to US$20.19, with the ongoing losses seemingly weighing on sentiment, despite no real changes to the earnings forecasts. 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 Qualtrics International analyst has a price target of US$50.00 per share, while the most pessimistic values it at US$16.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of Qualtrics International'shistorical trends, as the 48% annualised revenue growth to the end of 2022 is roughly in line with the 42% annual revenue growth over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 14% per year. So although Qualtrics International 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 take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Qualtrics International going out to 2024, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Qualtrics International you should know about.

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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.