Enfusion, Inc. Just Missed Earnings - But Analysts Have Updated Their Models

Enfusion, Inc. (NYSE:ENFN) just released its latest second-quarter report and things are not looking great. Results showed a clear earnings miss, with US$43m revenue coming in 4.2% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.01 missed the mark badly, arriving some 61% below what was expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Enfusion after the latest results.

Check out our latest analysis for Enfusion

Following the latest results, Enfusion's eight analysts are now forecasting revenues of US$173.1m in 2023. This would be an okay 5.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 67% to US$0.12. In the lead-up to this report, the analysts had been modelling revenues of US$186.5m and earnings per share (EPS) of US$0.12 in 2023. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

It'll come as no surprise then, to learn that the analysts have cut their price target 7.0% to US$10.43. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Enfusion analyst has a price target of US$12.00 per share, while the most pessimistic values it at US$9.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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 would highlight that Enfusion's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2023 being well below the historical 24% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% annually. Factoring in the forecast slowdown in growth, it looks like Enfusion is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Enfusion. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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.

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 Enfusion analysts - going out to 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Enfusion 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.