Investors in Qualtrics International Inc. (NASDAQ:XM) had a strong week as its shares rose 2.2% to close at US$13.00 after its quarterly earnings release. The results don’t look great, especially considering that statutory losses rose 16% to US$0.48 per share. Revenue of US$356,365,000 beat expectations by 3.3%, but that feels like cold comfort. It’s an important time for investors, as they can follow a company’s performance in its report, watch what experts are predicting for next year, and see if there’s been a change in company expectations. ‘company. We thought readers would find it interesting to see analysts’ latest post-earnings (statutory) forecasts for next year.
Check out our latest analysis for Qualtrics International
Given the latest results, the most recent consensus for Qualtrics International from 18 analysts is for revenue of US$1.43 billion in 2022, which, if achieved, would represent a whopping 22% increase in its sales over the past 12 months. Losses are expected to decline, declining 15% from a year ago to US$1.67. Prior to this latest report, consensus had expected revenue of $1.43 billion and losses of $1.67 billion per share.
As a result, it’s unexpected to see the consensus price target drop 43% to US$20.19 as analysts seem increasingly concerned about ongoing losses, although they haven’t brought any major change to their forecast. This is not the only conclusion we can draw from this data, however, as some investors also like to consider the discrepancy in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Qualtrics International at $50.00 per share, while the most bearish one values it at $16.00. So we wouldn’t give analysts’ price targets too much credence in this case, as there are clearly very different views on what kind of performance this activity can generate. With that in mind, we wouldn’t place too much reliance on the consensus price target, as it’s just an average and analysts clearly have deeply differing views on the company.
Of course, another way to look at these predictions is to put them in context with the industry itself. We can infer from the latest estimates that the forecast calls for a continuation of Qualtrics International’s historical trends, as annualized revenue growth of 48% through the end of 2022 is roughly in line with annualized revenue growth of 42% in course of the past year. In contrast, our data suggests that other companies (with analyst coverage) in a similar industry should see revenue growth of 14% annually. So, even if Qualtrics International is expected to maintain its revenue growth rate, it is definitely expected to grow faster than the industry as a whole.
The essential
The most important thing to remember is that analysts have reconfirmed their loss per share estimates for next year. Fortunately, they have also reconfirmed their revenue figures, suggesting sales are in line with expectations – and our data suggests revenue is set to grow faster than the industry as a whole. The consensus price target fell measurably as analysts seemed unreassured by the latest results, leading to a lower estimate of Qualtrics International’s future valuation.
Continuing this thinking, we believe that the company’s long-term outlook is much more relevant than next year’s results. We have estimates – from several Qualtrics International analysts – going out to 2024, and you can see them for free on our platform here.
And what about the risks? Every business has them, and we’ve spotted 2 warning signs for Qualtrics International you should know.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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