Caesars Entertainment misses Q2 earnings expectations, shares edge lower
On Friday, Piper Sandler analyst Brent Bracelin adjusted the price target on AvidXChange Holdings (NASDAQ:AVDX) shares, reducing it to $8.00 from the previous $10.00 while maintaining a Neutral rating on the company’s stock. According to InvestingPro data, the stock has fallen over 20% in the past week, with analyst targets now ranging from $7 to $14. The revision follows AvidXChange’s release of its fourth-quarter results, which were in line with Wall Street expectations, and its full-year 2025 guidance that fell short of consensus estimates.
The company’s guidance for the fiscal year 2025 suggests an 8% adjusted growth rate, a decrease from the 12% growth in fiscal year 2024, and a 19% EBITDA margin, which is essentially flat year over year. These projections are 6% and 14% below consensus, respectively. With EBITDA at $34 million for the last twelve months and a high P/E ratio of 183, InvestingPro analysis suggests the stock is trading above its Fair Value. Bracelin attributed the conservative guidance to a challenging macroeconomic environment and a transaction retention rate that is below 100%, which is factored into the low single-digit transaction growth forecast for FY25E.
Despite the subdued outlook, AvidXChange’s management expressed optimism about new partnerships, including one with a significant financial technology firm, and the potential for increased revenue through the Payment Accelerator 2.0 and Spend Management platforms, which are expected to ramp up monetization in the latter half of the year.
Bracelin noted that the lowered price target to $8 reflects potential prolonged disruptions to AvidXChange’s business model. However, based on the company’s Q4 exit rates, there is hope that adjusted growth and margins could surpass initial forecasts, provided that the macroeconomic conditions do not deteriorate further.
In other recent news, AvidXChange Holdings reported its fourth-quarter earnings for 2024, exceeding analyst expectations with an earnings per share (EPS) of $0.08, compared to the forecast of $0.07. The company also reported a revenue of $115.4 million, slightly above the anticipated $114.84 million, marking a 10.9% year-over-year increase. Despite these positive results, AvidXChange’s 2025 revenue guidance of $453 million to $460 million fell short of BTIG’s projections, leading the firm to adjust its price target from $14 to $11, while maintaining a Buy rating. KeyBanc Capital Markets downgraded AvidXChange’s stock rating from Overweight to Sector Weight, citing concerns over the company’s full-year 2025 outlook and challenges in growth strategy. The downgrade reflects apprehensions about macroeconomic headwinds and a slower rate of new customer additions. Meanwhile, Keefe, Bruyette & Woods reduced AvidXChange’s price target to $8 from $11, maintaining a Market Perform rating due to below-expected retention rates and a cautious macroeconomic outlook. These developments highlight the mixed sentiment among analysts regarding AvidXChange’s future performance amid broader economic uncertainties.
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