Gold prices set for weekly drop as dollar surges; Trump tariff action in focus
On Thursday, KeyBanc Capital Markets adjusted its stance on AvidXchange Holdings (NASDAQ:AVDX), downgrading the company’s stock rating from Overweight to Sector Weight due to a disappointing full-year 2025 (FY25) outlook and various challenges impacting growth. The stock, which has fallen nearly 24% in the past week and is trading near its 52-week low of $6.96, reflects these concerns. According to InvestingPro data, AVDX currently shows signs of being undervalued despite recent challenges. Despite AvidXchange’s fourth-quarter 2024 revenue slightly surpassing expectations, mainly from payment revenue upside, the company’s FY25 guidance did not meet analyst projections.
AvidXchange’s adjusted EBITDA and gross profit for the fourth quarter of 2024 showed further outperformance, but the FY25 guide indicated a top-to-bottom disappointment. KeyBanc analysts highlighted that macroeconomic difficulties and a weaker rate of new customer additions at the end of FY24 are causing increased scrutiny of AvidXchange’s growth strategy. However, they also noted positive developments, such as an increase in payment revenue monetization (excluding float) and management’s supportive commentary on AvidPay 2.0 and other new products, which are expected to boost electronic payment penetration and payment monetization, although the timeline remains uncertain.
KeyBanc pointed out that while new partner distribution programs, including those with Appfolio (NASDAQ:APPF) and M3, are ramping up well, the success in these "other" channels suggests that additional channel adds face more significant challenges. This observation contributed to the decision to downgrade the company’s stock rating.
Following the review of AvidXchange’s performance and outlook, KeyBanc analysts have revised their FY25 and FY26 estimates significantly lower, considering the downward revision of most inputs. While analyst targets range from $8 to $15 per share, three analysts have recently revised their earnings estimates downward. The downgrade reflects concerns over persistent macroeconomic headwinds, unexpected challenges in logo growth, and a lack of positive trends year-to-date. The new rating indicates a neutral stance on AvidXchange’s stock, aligning with the sector average. For detailed analysis and valuation metrics, investors can access the comprehensive Pro Research Report available exclusively on InvestingPro.
In other recent news, AvidXChange Holdings Inc. reported its Q4 2024 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.08, which was above the forecast of $0.07. The company’s revenue reached $115.4 million, slightly exceeding the anticipated $114.84 million, marking a year-over-year growth of 10.9%. Despite this earnings beat, BTIG analyst Andrew Harte adjusted the price target for AvidXChange to $11.00 from $14.00, while maintaining a Buy rating. This adjustment was due to the company’s fiscal year 2025 revenue guidance, which was set between $453 million and $460 million, falling short of BTIG and consensus expectations.
The guidance indicates a growth deceleration in core revenue, with an expected increase of approximately 8% for FY25, compared to the 13% growth in FY24. AvidXChange’s management remains optimistic about acquiring new customers, and the company’s core payments take rate remained stable in the fourth quarter. Additionally, AvidXChange has launched new products, including Payment Accelerator 2.0, and plans to introduce a new spend management platform in the latter half of 2025. These developments are part of the company’s strategy to enhance its AI-driven automation capabilities and expand its product offerings.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.