Morgan Stanley has revised its price target for AvidXchange (AVDX, Financial), increasing it from $8 to $10 while maintaining an Equal Weight rating. This adjustment comes in light of a joint acquisition proposal. Corpay (CPAY), which currently holds a 33% stake, and TPG, the majority owner with 67%, have agreed to acquire AvidXchange at $10 per share. Under the agreement, Corpay will also have the option to purchase TPG's interest in 2028.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for AvidXchange Holdings Inc (AVDX, Financial) is $9.90 with a high estimate of $13.00 and a low estimate of $8.00. The average target implies an upside of 1.64% from the current price of $9.74. More detailed estimate data can be found on the AvidXchange Holdings Inc (AVDX) Forecast page.
Based on the consensus recommendation from 13 brokerage firms, AvidXchange Holdings Inc's (AVDX, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for AvidXchange Holdings Inc (AVDX, Financial) in one year is $13.26, suggesting a upside of 36.14% from the current price of $9.74. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the AvidXchange Holdings Inc (AVDX) Summary page.
AVDX Key Business Developments
Release Date: February 26, 2025
- Revenue: $115.4 million in Q4 2024, up 10.9% year-over-year.
- Non-GAAP Gross Margin: 74.9% in Q4 2024, up 350 basis points from the previous year.
- Adjusted EBITDA: $26.3 million in Q4 2024, compared to $15.6 million in Q4 2023.
- Net Income: GAAP net income of $4.7 million in Q4 2024, compared to a net loss of $4.5 million in Q4 2023.
- Non-GAAP Diluted Earnings Per Share: $0.08 in Q4 2024, up from $0.05 in Q4 2023.
- Transaction Yield: $5.80 per transaction in Q4 2024, up 6.4% from $5.45 in Q4 2023.
- Software Revenue: $30.9 million in Q4 2024, up 6.4% year-over-year.
- Payment Revenue: $83.4 million in Q4 2024, up 12.3% year-over-year.
- Cash Position: $389.3 million in cash and marketable securities at year-end 2024.
- Share Repurchase: $25 million worth of shares repurchased in Q4 2024, totaling $50 million for the year.
- 2025 Revenue Outlook: Expected to be in the range of $453 million to $460 million.
- 2025 Adjusted EBITDA Outlook: Expected to range between $86 million and $91 million.
- 2025 Non-GAAP Diluted EPS Outlook: Expected to be between $0.25 and $0.27.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AvidXchange Holdings Inc (AVDX, Financial) exceeded expectations across all core financial metrics, including revenues, gross margin, and EBITDA margin.
- The company achieved significant non-GAAP gross and adjusted EBITDA margin expansion, with gross margins reaching almost 75% and EBITDA margins nearly 23%.
- AvidXchange Holdings Inc (AVDX) repurchased $25 million worth of shares in Q4 2024, demonstrating confidence in its long-term business prospects.
- The company has strong free cash flow generation and disciplined capital allocation, contributing to its robust financial position.
- AvidXchange Holdings Inc (AVDX) is making strides in AI and automation, which are expected to drive further efficiency and margin expansion.
Negative Points
- The macroeconomic environment remains challenging, impacting top-of-funnel customer engagement and buyer logo growth metrics.
- Overall top-of-funnel opportunities were down roughly 2%, partly due to changes in the go-to-market strategy and macroeconomic conditions.
- The HOA vertical underperformed expectations due to macro headwinds, with a slowdown in spending by HOA Boards.
- Retention rates are below the company's historical norms, with volume retention being sub-100%, indicating macroeconomic pressures.
- The company's growth trajectory has been below target due to the macro environment, affecting its ability to achieve the Rule of 40 target.
