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Capital Bancorp, Inc. Just Recorded A 98% EPS Beat: Here's What Analysts Are Forecasting Next

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Simply Wall St
·3 min read
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As you might know, Capital Bancorp, Inc. (NASDAQ:CBNK) just kicked off its latest quarterly results with some very strong numbers. Statutory earnings performance was extremely strong, with revenue of US$43m beating expectations by 42% and earnings per share (EPS) of US$0.61, an impressive 98%ahead of expectations. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Capital Bancorp

earnings-and-revenue-growth
earnings-and-revenue-growth

After the latest results, the four analysts covering Capital Bancorp are now predicting revenues of US$121.7m in 2021. If met, this would reflect a modest 5.6% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to sink 15% to US$1.31 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$121.7m and earnings per share (EPS) of US$1.23 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at US$13.00, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Capital Bancorp at US$14.00 per share, while the most bearish prices it at US$12.00. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Capital Bancorp's revenue growth is expected to slow, with forecast 5.6% increase next year well below the historical 16%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 1.3% next year. So it's pretty clear that, while Capital Bancorp's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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 Capital Bancorp following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Capital Bancorp going out to 2022, and you can see them free on our platform here.

You still need to take note of risks, for example - Capital Bancorp has 1 warning sign we think you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.