Bank7 Corp. (NASDAQ:BSVN) shareholders are probably feeling a little disappointed, since its shares fell 5.0% to US$9.07 in the week after its latest third-quarter results. The result was positive overall - although revenues of US$12m were in line with what the analysts predicted, Bank7 surprised by delivering a statutory profit of US$0.48 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the three analysts covering Bank7 are now predicting revenues of US$45.3m in 2021. If met, this would reflect a reasonable 4.1% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to plunge 31% to US$1.42 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$45.8m and earnings per share (EPS) of US$1.45 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$12.33, suggesting that the company has met expectations in its recent result. 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 Bank7, with the most bullish analyst valuing it at US$13.00 and the most bearish at US$12.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Bank7's past performance and to peers in the same industry. We would highlight that Bank7's revenue growth is expected to slow, with forecast 4.1% increase next year well below the historical 6.2%p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 1.2% next year. Even after the forecast slowdown in growth, it seems obvious that Bank7 is also expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$12.33, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Bank7 going out to 2022, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 4 warning signs with Bank7 (at least 1 which can't be ignored) , and understanding these should be part of your investment process.
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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