Yahoo Finance Earnings Release: Here's Why Analysts Cut Their Remitly Global, Inc. (NASDAQ:RELY) Price Target To US$19.71
There's been a major selloff in Remitly Global, Inc. (NASDAQ:RELY) shares in the week since it released its first-quarter report, with the stock down 25% to US$8.30. Sales hit US$136m in line with forecasts, although the company reported a statutory loss per share of US$0.14 that was somewhat smaller than the analysts expected. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Remitly Global
After the latest results, the seven analysts covering Remitly Global are now predicting revenues of US$614.3m in 2022. If met, this would reflect a major 22% improvement in sales compared to the last 12 months. Losses are forecast to balloon 73% to US$0.56 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$611.4m and losses of US$0.54 per share in 2022. So it's pretty clear consensus is mixed on Remitly Global after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a pronounced increase to per-share loss expectations.
With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 11% to US$19.71, with the analysts signalling that growing losses would be a definite concern. 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 Remitly Global at US$23.00 per share, while the most bearish prices it at US$15.00. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Remitly Global's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 30% growth on an annualised basis. This is compared to a historical growth rate of 67% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% per year. Even after the forecast slowdown in growth, it seems obvious that Remitly Global is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased 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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Remitly Global's future valuation.
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 Remitly Global analysts - going out to 2024, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with Remitly Global (including 1 which doesn't sit too well with us) .
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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.
