Always keep your enemies confused. If they’re never sure who you are or what you want, they may not know what you’re likely to do next. – George RR Martin
Today we take our first look watch Expensive (NASDAQ: EXFY). The company debuted in the fourth quarter of 2021 and shares have been rapidly found in “OPI burstterritories. An “open risk” market is the one that carries the weight of the blame for this decline. Can the shares be recovered? We try to answer this question using the following analysis.
Expensify is headquartered in Portland, OR. The company has developed and provides a cloud-based expense management software platform for individuals, small businesses and corporations. The capabilities of this platform help companies manage corporate cards, pay bills, scan receipts, generate invoices, collect payments and book travel. The stock is currently trading at about $ 16.50 per share and has a market capitalization of approximately $ 1.5 billion.
Fourth quarter results:
The company reported fourth quarter names at the end of March. They were quite disappointing. Expensify reported a GAAP loss of 82 cents per share, well above the expected 8 cents per share. Total net loss for the quarter was $ 21.9 million. It is important to keep two things in mind. First, that figure included a $ 14.2 million single IPO-related expense. Another $ 12.1 million was for share-based compensation. Second, even with that in mind, the GAAP loss was significantly above consensus, although management intended to focus on positive EBITDA if you only removed those two items.
The company saw revenue rise 56% year-over-year to $ 40.4 million, slightly above the consensus estimate. For fiscal year 2021, revenues increased 62% from 2020 levels to $ 142.8 million. The company provided the following guidance for this first quarter of the new fiscal year.
Analyst Comment and Balance Sheet:
Since the fourth quarter results were released, four analyst companies, including Piper Sandler and JP Morgan, have reiterated their stock buy ratings. Although, two of them had downward target price revisions. The price targets offered range from $ 25 to $ 47 per share now. Both Bank of America ($ 22 target price) and Loop Capital Management ($ 17, below the previous $ 22) maintained stock maintenance ratings.
The company closed the year 2021 with just under $ 100 million in cash and marketable securities on its balance sheet against just over $ 50 million in long-term debt. Currently, just over 12% of outstanding shares remain in the short term. There has been no privileged activity in the shares (neither buying nor selling) until 2022.
The current consensus among analysts is that Expensify will earn approximately 30 cents per share in fiscal year 2022, as revenue is up 25% projected to just under $ 180 million. This allows the company to sell a little more than seven times the projected equalization of fiscal year 2022 for the next cash balance sheet. Expensive, but certainly less than the 14-15 times that Expensify was valued when it went public less than a year ago.
Expensify is moving towards profitability and it would be possible to justify the payment of this premium if sales are expected to grow by 25% to 35% CAGR over the next few years, as is the company’s management. at this moment.
I’m not quite there yet, although Expensify is targeting a huge potential market. If the market environment weren’t so bleak by 2022, I would probably start a little “watch article” with that name. So it’s worth watching Expensify, but we don’t have any stock recommendations at this time. Maybe when the company starts posting quarterly earnings (no adjustments) and / or insiders start buying the download, we’ll visit Expensify again at that time and do a status check.
Every man should lose a battle in his youth, lest he lose a war when he is old“- George RR Martin
Bret Jensen is the founder and author of articles on the Biotech Forum, the Busted IPO Forum and the Insiders Forum.