Weave Communications (WEAV) Stock Forecast & Price Target

Weave Communications Inc. demonstrated a strong financial performance in Q3, with revenue increasing by 17.1% year-over-year to reach $61.3 million, surpassing growth expectations. The company’s subscription and payment revenue also showed robust growth, with core payments expanding by 40% year-over-year, indicating a significant opportunity for future adoption and revenue expansion in the payments segment. Additionally, management highlighted a growing and diverse sales pipeline, suggesting sustained momentum and potential for ongoing operational improvements across its specialty medical and mid-market segments.

Weave Communications Inc. has lowered its Q4 revenue guidance by $0.5 million at the midpoint, suggesting challenges in sustaining growth momentum despite a full Q3 beat. The company has experienced a year-over-year decline in net revenue retention (NRR), dropping from 98% to 94%, attributed to higher churn rates linked to expansion into specialty medical verticals and the lack of pricing inflations benefits. Furthermore, the anticipated risks from an economic downturn affecting small business software spending, combined with slower-than-expected adoption of new engagement modules and payment offerings, support a cautious outlook on the company's financial stability and growth prospects.