Middlefield Banc Corp. Just Missed Earnings - But Analysts Have Updated Their Models
It's shaping up to be a tough period for Middlefield Banc Corp. (NASDAQ:MBCN), which a week ago released some disappointing third-quarter results that could have a notable impact on how the market views the stock. Middlefield Banc missed earnings this time around, with US$18m revenue coming in 2.8% below what the analysts had modelled. Statutory earnings per share (EPS) of US$0.47 also fell short of expectations by 19%. 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.
Check out our latest analysis for Middlefield Banc
Taking into account the latest results, the current consensus from Middlefield Banc's four analysts is for revenues of US$72.0m in 2024. This would reflect a modest 4.4% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to descend 11% to US$1.91 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$72.9m and earnings per share (EPS) of US$2.04 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target fell 5.2% to US$27.50, with the analysts clearly linking lower forecast earnings to the performance of the stock price. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Middlefield Banc, with the most bullish analyst valuing it at US$28.00 and the most bearish at US$27.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Middlefield Banc is an easy business to forecast or the the analysts are all using similar assumptions.
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. It's pretty clear that there is an expectation that Middlefield Banc's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.5% growth on an annualised basis. This is compared to a historical growth rate of 9.5% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.3% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Middlefield Banc.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Middlefield Banc. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Middlefield Banc's revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Middlefield Banc. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Middlefield Banc analysts - going out to 2025, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Middlefield Banc (1 shouldn't be ignored) you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
