Eagle Bancorp, Inc. (NASDAQ:EGBN) came out with its second-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues were US$81m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.90, an impressive 36% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Eagle Bancorp after the latest results.
Taking into account the latest results, the consensus forecast from Eagle Bancorp's five analysts is for revenues of US$338.0m in 2020, which would reflect a decent 8.8% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to descend 12% to US$3.29 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$331.9m and earnings per share (EPS) of US$3.17 in 2020. So the consensus seems to have become somewhat more optimistic on Eagle Bancorp's earnings potential following these results.
The consensus price target was unchanged at US$35.63, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Eagle Bancorp, with the most bullish analyst valuing it at US$37.00 and the most bearish at US$32.50 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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. Next year brings more of the same, according to the analysts, with revenue forecast to grow 8.8%, in line with its 7.5% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 2.0% next year. So although Eagle Bancorp is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Eagle Bancorp following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$35.63, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Eagle Bancorp. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Eagle Bancorp analysts - going out to 2024, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Eagle Bancorp (1 is a bit concerning) you should be aware of.
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. 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.
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