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Guaranty Bancshares, Inc. (NASDAQ:GNTY) just released its latest quarterly results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.1% to hit US$29m. Guaranty Bancshares also reported a statutory profit of US$0.92, which was an impressive 46% above what the analysts had forecast. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Guaranty Bancshares after the latest results.
Taking into account the latest results, the most recent consensus for Guaranty Bancshares from three analysts is for revenues of US$105.8m in 2021 which, if met, would be a decent 12% increase on its sales over the past 12 months. Statutory earnings per share are predicted to rise 8.6% to US$2.40. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$102.5m and earnings per share (EPS) of US$2.07 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice gain to earnings per share in particular.
It will come as no surprise to learn that the analysts have increased their price target for Guaranty Bancshares 9.5% to US$32.67on the back of these upgrades.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Guaranty Bancshares'historical trends, as next year's 12% revenue growth is roughly in line with 12% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 1.4% per year. So it's pretty clear that Guaranty Bancshares is forecast to grow substantially faster than its 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 Guaranty Bancshares following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Guaranty Bancshares. Long-term earnings power is much more important than next year's profits. We have forecasts for Guaranty Bancshares going out to 2022, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Guaranty Bancshares that 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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