As you might know, Workiva Inc. (NYSE:WK) just kicked off its latest quarterly results with some very strong numbers. Results overall were solid, with revenues arriving 4.2% better than analyst forecasts at US$88m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.22 per share, were 4.2% smaller than the analysts expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Workiva after the latest results.
See our latest analysis for Workiva
After the latest results, the seven analysts covering Workiva are now predicting revenues of US$399.8m in 2021. If met, this would reflect a notable 18% improvement in sales compared to the last 12 months. Losses are expected to increase slightly, to US$1.25 per share. Before this latest report, the consensus had been expecting revenues of US$391.3m and US$1.22 per share in losses. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although there was a nice uplift to revenue, the consensus also made a to its losses per share forecasts.
There was no major change to the consensus price target of US$67.50, with growing revenues seemingly enough to offset the concern of growing losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Workiva at US$85.00 per share, while the most bearish prices it at US$52.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Next year brings more of the same, according to the analysts, with revenue forecast to grow 18%, in line with its 17% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 13% per year. So it's pretty clear that Workiva is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$67.50, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Workiva. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Workiva analysts - going out to 2022, and you can see them free on our platform here.
Before you take the next step you should know about the 4 warning signs for Workiva (1 doesn't sit too well with us!) that we have uncovered.
This article by Simply Wall St is general in nature. 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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