Analysts Are Betting On AvidXchange Holdings, Inc. (NASDAQ:AVDX) With A Big Upgrade This Week

Simply Wall St
·3 min read

Shareholders in AvidXchange Holdings, Inc. (NASDAQ:AVDX) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that AvidXchange Holdings will make substantially more sales than they'd previously expected. Investors have been pretty optimistic on AvidXchange Holdings too, with the stock up 11% to US$7.98 over the past week. Could this upgrade be enough to drive the stock even higher?

Following the upgrade, the latest consensus from AvidXchange Holdings' eleven analysts is for revenues of US$337m in 2022, which would reflect a decent 19% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 40% to US$0.53. However, before this estimates update, the consensus had been expecting revenues of US$306m and US$0.55 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

See our latest analysis for AvidXchange Holdings

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Despite these upgrades, the analysts have not made any major changes to their price target of US$11.08, implying that their latest estimates don't have a long term impact on what they think the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values AvidXchange Holdings at US$13.00 per share, while the most bearish prices it at US$9.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that AvidXchange Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 43% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 32% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that AvidXchange Holdings is expected to grow much faster than its industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting AvidXchange Holdings is moving incrementally towards profitability. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at AvidXchange Holdings.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for AvidXchange Holdings going out to 2024, and you can see them free on our platform here..

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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