Colony Bankcorp, Inc. Just Missed EPS By 11%: Here's What Analysts Think Will Happen Next
Colony Bankcorp, Inc. (NASDAQ:CBAN) missed earnings with its latest first-quarter results, disappointing overly-optimistic forecasters. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$28m, statutory earnings missed forecasts by 11%, coming in at just US$0.34 per share. Following the result, the 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Colony Bankcorp after the latest results.
See our latest analysis for Colony Bankcorp
After the latest results, the three analysts covering Colony Bankcorp are now predicting revenues of US$117.8m in 2022. If met, this would reflect a notable 9.4% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to bounce 35% to US$1.46. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$126.8m and earnings per share (EPS) of US$1.78 in 2022. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.
The analysts made no major changes to their price target of US$22.50, suggesting the downgrades are not expected to have a long-term impact on Colony Bankcorp'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 Colony Bankcorp, with the most bullish analyst valuing it at US$23.00 and the most bearish at US$21.50 per share. This is a very narrow spread of estimates, implying either that Colony Bankcorp is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Colony Bankcorp's revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2022 being well below the historical 18% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.7% per year. Even after the forecast slowdown in growth, it seems obvious that Colony Bankcorp is also expected to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Colony Bankcorp. They also downgraded their revenue estimates, although industry data suggests that Colony Bankcorp's revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$22.50, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Colony Bankcorp going out to 2023, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Colony Bankcorp (1 is a bit unpleasant) you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
