EXFY - Expensify cut to Underweight at Morgan Stanley on structural macro headwinds

2023-06-12 11:36:04 ET

• Morgan Stanley on Monday downgraded Expensify ( NASDAQ: EXFY ) to Underweight from Equal-weight, given structural and macro headwinds as well as relatively unattractive risk/reward.
• Shares of Expensify ( EXFY ) fell as much as 16% on Monday, before paring losses to trade 7.8% lower.
• "We expect EXFY to face challenges near-term as the core business works through structural and macro-related headwinds, and new product contribution remains highly uncertain," said analyst James Faucette. "Muted catalyst path and downside skew to estimates leads us to downgrade."
• Faucette said Expensify's ( EXFY ) Q1 results showed ongoing pressure across its KPIs, including stagnating paid user growth and ARPU expansion.
• He noted that new product expansion is likely to be difficult given competitive intensity and limited scale.
• Morgan Stanley cut its estimates for Expensify's ( EXFY ) 2023/2024 revenue to $163.4M/$175.1M from $183.4M/$203.9M ($168.33M/$182.46M consensus ).
• Price target was cut to $5 from $9, implying 30.3% potential downside to EXFY's last close.
• Now read - Expensify: Downside Is Limited Considering Valuations And Buybacks

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