As you might know, Upland Software, Inc. (NASDAQ:UPLD) recently reported its quarterly numbers. Revenues were a bright spot, with US$69m in revenue arriving 2.3% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.47, some 3.9% below consensus predictions. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the consensus from Upland Software's six analysts is for revenues of US$275.1m in 2024, which would reflect a measurable 3.9% decline in revenue compared to the last year of performance. Losses are forecast to narrow 7.1% to US$4.69 per share. Before this earnings announcement, the analysts had been modelling revenues of US$275.0m and losses of US$4.01 per share in 2024. While this year's revenue estimates held steady, there was also a noticeable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The consensus price target fell 29% to US$3.33per share, with the analysts clearly concerned by ballooning losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Upland Software analyst has a price target of US$5.00 per share, while the most pessimistic values it at US$2.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 7.7% by the end of 2024. This indicates a significant reduction from annual growth of 6.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 12% per year. It's pretty clear that Upland Software's revenues are expected to perform substantially worse 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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 Upland Software's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Upland Software going out to 2025, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 3 warning signs for Upland Software you should be aware of.
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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.
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