Yahoo Finance Repay Holdings Corporation Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
There's been a major selloff in Repay Holdings Corporation (NASDAQ:RPAY) shares in the week since it released its quarterly report, with the stock down 31% to US$10.00. It looks like a credible result overall - although revenues of US$68m were what the analysts expected, Repay Holdings surprised by delivering a statutory profit of US$0.12 per share, instead of the previously forecast loss. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Repay Holdings
Following the latest results, Repay Holdings' ten analysts are now forecasting revenues of US$301.2m in 2022. This would be a sizeable 26% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 48% to US$0.11. Before this latest report, the consensus had been expecting revenues of US$301.5m and US$0.11 per share in losses.
As a result, it's unexpected to see that the consensus price target fell 5.0% to US$22.60, with the analysts seemingly becoming more concerned about ongoing losses, despite making no major changes to their 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 Repay Holdings analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$18.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. The analysts are definitely expecting Repay Holdings' growth to accelerate, with the forecast 36% annualised growth to the end of 2022 ranking favourably alongside historical growth of 28% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Repay Holdings to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Repay Holdings' future valuation.
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 estimates - from multiple Repay Holdings analysts - going out to 2024, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 4 warning signs for Repay Holdings 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.
