With A -127.82% Earnings Drop, Did Atlantic Capital Bancshares Inc (NASDAQ:ACBI) Really Underperform?
Analyzing Atlantic Capital Bancshares Inc’s (NASDAQ:ACBI) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess ACBI’s recent performance announced on 31 December 2017 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for Atlantic Capital Bancshares
Did ACBI perform worse than its track record and industry?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique enables me to assess different companies on a more comparable basis, using the most relevant data points. For Atlantic Capital Bancshares, its most recent trailing-twelve-month earnings is -US$3.73M, which, in comparison to the prior year’s level, has turned from positive to negative. Given that these figures are relatively nearsighted, I’ve created an annualized five-year value for Atlantic Capital Bancshares’s net income, which stands at US$6.49M.
We can further evaluate Atlantic Capital Bancshares’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Atlantic Capital Bancshares’s top-line has increased by 26.49% on average, signalling that the company is in a high-growth phase with expenses racing ahead revenues, leading to annual losses. Looking at growth from a sector-level, the US banks industry has been growing, albeit, at a subdued single-digit rate of 4.21% in the previous year, and 8.46% over the previous five years. This suggests that any recent headwind the industry is facing, it’s hitting Atlantic Capital Bancshares harder than its peers.
What does this mean?
Though Atlantic Capital Bancshares’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to envisage what will happen in the future and when. The most useful step is to examine company-specific issues Atlantic Capital Bancshares may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Atlantic Capital Bancshares to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for ACBI’s future growth? Take a look at our free research report of analyst consensus for ACBI’s outlook.
2. Financial Health: Is ACBI’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
