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Last week, you might have seen that ConnectOne Bancorp, Inc. (NASDAQ:CNOB) released its yearly result to the market. The early response was not positive, with shares down 2.5% to US$24.85 in the past week. Revenues of US$186m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$2.07, missing estimates by 2.1%. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for ConnectOne Bancorp from three analysts is for revenues of US$223.7m in 2020, which is a sizeable 20% increase on its sales over the past 12 months. Statutory earnings per share are expected to accumulate 7.5% to US$2.24. Yet prior to the latest earnings, analysts had been forecasting revenues of US$228.4m and earnings per share (EPS) of US$2.28 in 2020. Analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
Despite the cuts to forecast earnings, there was no real change to the US$29.67 price target, showing that analysts don't think the changes have a meaningful impact on the stock's intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on ConnectOne Bancorp, with the most bullish analyst valuing it at US$30.00 and the most bearish at US$29.50 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Analysts are definitely expecting ConnectOne Bancorp's growth to accelerate, with the forecast 20% growth ranking favourably alongside historical growth of 13% per annum over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 4.9% next year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect ConnectOne Bancorp to grow faster than the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately analysts also downgraded their revenue estimates, although industry data suggests that ConnectOne Bancorp's revenues are expected to grow faster than the wider market. The consensus price target held steady at US$29.67, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that in mind, we wouldn't be too quick to come to a conclusion on ConnectOne Bancorp. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple ConnectOne Bancorp analysts - going out to 2021, and you can see them free on our platform here.
It might also be worth considering whether ConnectOne Bancorp's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
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