Can Capital Bancorp (CBNK) Run Higher on Rising Earnings Estimates?
Capital Bancorp (CBNK) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.
Analysts' growing optimism on the earnings prospects of this company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Capital Bancorp, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.
Current-Quarter Estimate Revisions
The company is expected to earn $0.75 per share for the current quarter, which represents a year-over-year change of +5.63%.
Over the last 30 days, two estimates have moved higher for Capital Bancorp compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 18.25%.
Current-Year Estimate Revisions
For the full year, the earnings estimate of $3.03 per share represents a change of +10.99% from the year-ago number.
The revisions trend for the current year also appears quite promising for Capital Bancorp, with two estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 5.95%.
Favorable Zacks Rank
The promising estimate revisions have helped Capital Bancorp earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Bottom Line
Capital Bancorp shares have added 8.1% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.
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