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The Bancorp, Inc. Beat Revenue Forecasts By 13%: Here's What Analysts Are Forecasting Next

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Simply Wall St
·3 min read
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The Bancorp, Inc. (NASDAQ:TBBK) just released its latest quarterly results and things are looking bullish. Bancorp beat revenue and statutory earnings per share (EPS) expectations, with sales hitting US$43m (13% ahead of estimates) and EPS reaching US$0.22 (a 4.8% beat). The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Bancorp

NasdaqGS:TBBK Past and Future Earnings May 4th 2020
NasdaqGS:TBBK Past and Future Earnings May 4th 2020

Following the recent earnings report, the consensus from two analysts covering Bancorp is for revenues of US$167.2m in 2020, implying a disturbing 29% decline in sales compared to the last 12 months. Per-share earnings are expected to leap 39% to US$1.16. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$148.7m and earnings per share (EPS) of US$1.13 in 2020. The analysts seem more optimistic after the latest results, with a decent improvement in revenue and a slight bump in earnings per share estimates.

Despite these upgrades, the consensus price target fell 12% to US$11.00, perhaps signalling that the uplift in performance is not expected to last.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 29%, a significant reduction from annual growth of 12% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Bancorp is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Bancorp following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Bancorp's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Bancorp. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Bancorp going out as far as 2021, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Bancorp that you should be aware of.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.