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Earnings Beat: TriState Capital Holdings, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Simply Wall St
·4 mins read

A week ago, TriState Capital Holdings, Inc. (NASDAQ:TSC) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 5.5% to hit US$48m. TriState Capital Holdings also reported a statutory profit of US$0.39, which was an impressive 50% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for TriState Capital Holdings

NasdaqGS:TSC Past and Future Earnings April 22nd 2020
NasdaqGS:TSC Past and Future Earnings April 22nd 2020

Taking into account the latest results, the consensus forecast from TriState Capital Holdings' four analysts is for revenues of US$196.3m in 2020, which would reflect an okay 7.7% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to nosedive 32% to US$1.25 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$185.1m and earnings per share (EPS) of US$1.22 in 2020. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Despite these upgrades,the analysts have not made any major changes to their price target of US$17.20, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic TriState Capital Holdings analyst has a price target of US$20.00 per share, while the most pessimistic values it at US$13.50. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. We would highlight that TriState Capital Holdings' revenue growth is expected to slow, with forecast 7.7% increase next year well below the historical 14%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.9% next year. So it's pretty clear that, while TriState Capital Holdings' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around TriState Capital Holdings' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$17.20, 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 TriState Capital Holdings going out to 2021, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for TriState Capital Holdings (of which 1 is a bit unpleasant!) you should know about.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.