Bank7 Corp. (NASDAQ:BSVN) shares fell 2.5% to US$18.19 in the week since its latest annual results. It looks like the results were a bit of a negative overall. While revenues of US$43m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.6% to hit US$0.81 per share. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Bank7 from three analysts is for revenues of US$46.3m in 2020, which is a credible 6.4% increase on its sales over the past 12 months. Statutory earnings per share are expected to shoot up 140% to US$1.94. In the lead-up to this report, analysts had been modelling revenues of US$45.9m and earnings per share (EPS) of US$1.98 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
Analysts reconfirmed their price target of US$23.33, showing that the business is executing well and in line with expectations. 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. The most optimistic Bank7 analyst has a price target of US$24.00 per share, while the most pessimistic values it at US$22.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
Further, we can compare these estimates to past performance, and see how Bank7 forecasts compare to the wider market's forecast performance. We would highlight that Bank7's revenue growth is expected to slow, with forecast 6.4% increase next year well below the historical 11%p.a. growth over the last three years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.9% next year. So it's pretty clear that, while Bank7's revenue growth is expected to slow, it's still expected to grow faster than the market itself.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Bank7's revenues are expected to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for Bank7 going out to 2021, and you can see them free on our platform here.
We also provide an overview of the Bank7 Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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