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Bank7 Corp. (NASDAQ:BSVN) just released its second-quarter report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 3.4% to hit US$12m. Bank7 also reported a statutory profit of US$0.54, which was an impressive 71% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Bank7 from three analysts is for revenues of US$48.1m in 2020 which, if met, would be a meaningful 9.3% increase on its sales over the past 12 months. Per-share earnings are expected to leap 126% to US$1.85. In the lead-up to this report, the analysts had been modelling revenues of US$48.0m and earnings per share (EPS) of US$1.50 in 2020. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the massive increase in earnings per share expectations following these results.
There's been no major changes to the consensus price target of US$12.50, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Bank7, with the most bullish analyst valuing it at US$13.50 and the most bearish at US$12.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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. It's clear from the latest estimates that Bank7's rate of growth is expected to accelerate meaningfully, with the forecast 9.3% revenue growth noticeably faster than its historical growth of 4.1% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 1.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Bank7 is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Bank7's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$12.50, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Bank7 going out to 2022, and you can see them free on our platform here.
It is also worth noting that we have found 5 warning signs for Bank7 (1 is a bit unpleasant!) that you need to take into consideration.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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