When Lakeland Bancorp Inc (NASDAQ:LBAI) announced its most recent earnings (31 December 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Lakeland Bancorp has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see LBAI has performed. Check out our latest analysis for Lakeland Bancorp
How LBAI fared against its long-term earnings performance and its industry
For the most up-to-date info, I use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This enables me to examine various companies on a similar basis, using new information. For Lakeland Bancorp, its most recent earnings (trailing twelve month) is US$52.10M, which, relative to the previous year’s figure, has moved up by 26.70%. Since these figures may be relatively short-term, I’ve created an annualized five-year value for Lakeland Bancorp’s earnings, which stands at US$29.91M This shows that, generally, Lakeland Bancorp has been able to increasingly grow its profits over the last couple of years as well.
How has it been able to do this? Let’s take a look at if it is solely due to industry tailwinds, or if Lakeland Bancorp has seen some company-specific growth. Over the past couple of years, Lakeland Bancorp grew its bottom line faster than revenue by successfully controlling its costs. This brought about a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US banks industry has been growing, albeit, at a unexciting single-digit rate of 3.74% in the prior twelve months, and 8.04% over the past half a decade. This means any near-term headwind the industry is facing, the impact on Lakeland Bancorp has been softer relative to its peers.
What does this mean?
Lakeland Bancorp’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Lakeland Bancorp has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Lakeland Bancorp to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for LBAI’s future growth? Take a look at our free research report of analyst consensus for LBAI’s outlook.
- 2. Financial Health: Is LBAI’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.