How Does MVB Financial Corp’s (NASDAQ:MVBF) Earnings Growth Stack Up Against Industry Performance?
When MVB Financial Corp (NASDAQ:MVBF) announced its most recent earnings (30 September 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 MVB Financial 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 MVBF has performed. Check out our latest analysis for MVB Financial
Did MVBF’s recent earnings growth beat the long-term trend and the industry?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend allows me to analyze different companies in a uniform manner using the most relevant data points. For MVB Financial, its latest earnings (trailing twelve month) is US$7.77M, which, in comparison to last year’s figure, has increased by 11.57%. Since these figures are relatively nearsighted, I’ve determined an annualized five-year figure for MVBF’s earnings, which stands at US$4.45M This suggests that, on average, MVB Financial has been able to increasingly raise its bottom line over the past few years as well.
What’s the driver of this growth? Let’s see if it is solely attributable to industry tailwinds, or if MVB Financial has seen some company-specific growth. The hike in earnings seems to be propelled by a strong top-line increase outstripping its growth rate of costs. Though this resulted in a margin contraction, it has made MVB Financial more profitable. Eyeballing growth from a sector-level, the US banks industry has been growing, albeit, at a muted single-digit rate of 4.18% over the previous twelve months, and 8.55% over the past five. This means that any near-term headwind the industry is experiencing, MVB Financial is relatively better-cushioned than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research MVB Financial to get a more holistic view of the stock by looking at:
1. Financial Health: Is MVBF’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.
2. Valuation: What is MVBF worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MVBF is currently mispriced by the market.
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 30 September 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.
