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Expensify (NASDAQ:EXFY) stock retreated 3% in Friday late morning trading after J.P. Morgan started coverage of the cloud-based expense management software with an Underweight rating, calling its business model “challenged.”
While the company’s expense management solutions for small businesses “is easy to adapt and integrate,” analyst Alexei Gogolev sees “limited differentiation vs. competitors that aid in easing expense management, bill paying, invoicing, etc.,” he wrote in a note.
The industry itself is suffering from macroeconomic headwinds, chiefly higher interest rates, which is creating lower visibility into EXFY’s revenue and “reduces the efficiency of the word-of-mouth, bottom-up customer acquisition model,” the note said.
The Underweight rate agrees with the SA Quant system rating of Strong Sell and disagrees with the average sell-side analyst rating of Buy.
