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Does Republic Bancorp Inc’s (RBCAA) 17.3% Earnings Growth Make It An Outperformer?

Ricardo Landis

Examining Republic Bancorp Inc’s (NASDAQ:RBCA.A) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess RBCA.A’s latest performance announced on 30 September 2017 and compare these figures to its longer term trend and industry movements. Check out our latest analysis for Republic Bancorp

Did RBCA.A beat its long-term earnings growth trend and its industry?

To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to examine many different companies in a uniform manner using the most relevant data points. Republic Bancorp’s latest earnings is $50.8M, which, relative to last year’s level, has jumped up by 17.25%. Since these values are somewhat short-term, I have determined an annualized five-year value for Republic Bancorp’s net income, which stands at $56.7M. This means although earnings increased from last year’s level, over the long run, Republic Bancorp’s earnings have been falling on average.

NasdaqGS:RBCA.A Income Statement Dec 12th 17
NasdaqGS:RBCA.A Income Statement Dec 12th 17

Why is this? Well, let’s look at what’s occurring with margins and whether the rest of the industry is facing the same headwind. Although revenue growth over the past few years, has been negative, earnings growth has been declining by even more, suggesting that Republic Bancorp has been increasing its expenses. This harms margins and earnings, and is not a sustainable practice. Looking at growth from a sector-level, the US banks industry has been growing its average earnings by double-digit 10.20% over the past twelve months, and a more subdued 9.05% over the past five years. This means that whatever tailwind the industry is gaining from, Republic Bancorp is able to leverage this to its advantage.

What does this mean?

Republic Bancorp’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. There may be variables that are impacting the industry as a whole, hence the high industry growth rate over the same time period. You should continue to research Republic Bancorp to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for RBCA.A’s future growth? Take a look at our free research report of analyst consensus for RBCA.A’s outlook.

2. Financial Health: Is RBCA.A’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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.